AG2006/4614, Transcript of Proceedings [2007] AIRCTrans 194 (19 April 2007)

TRANSCRIPT OF PROCEEDINGS

---

Workplace Relations Act 1996 16754-1

VICE PRESIDENT WATSON

AG2006/4614

APPLICATION BY AUSTRALIAN AND INTERNATIONAL PILOTS ASSOCIATION
s.170MD(6) - pre-reform Act Variation of certified agreement to remove ambiguity
(AG2006/4614)

SYDNEY

10.07AM, TUESDAY, 03 APRIL 2007

Continued from 15/12/2006

Hearing continuing

PN1

THE VICE PRESIDENT: Any changes in the appearances?

PN2

MR J NOLAN: I think there may be a change in the sense that at the Bar table with me on this occasion I have CAPTAIN J LUNT and
CAPTAIN M NEWNNAM.

PN3

MR KENZIE: I appear on behalf of Qantas with MS P EMERY.

PN4

THE VICE PRESIDENT: Mr Nolan.

PN5

MR NOLAN: Your Honour will have received some documents further to the directions that were made some little while ago now and your Honour, of course, is well acquainted with the subject-matter of this phase of the proceedings. Outlines of submissions having been filed, I didn't intend to elaborate upon what was said in the outline of submissions to any degree at all, but it might be convenient to mark the documents that have been filed just so that we can keep track of what's what. It occurred to me that there was also, just for completeness - of course there has been reference to that letter of 4 July 1983. That was
exhibit N3 in the previous phase of the proceedings. Whether or not that stays, whether those proceedings are just carried forward or whether we're starting afresh, it will be necessary to have some formal record of that exhibit in this phase of the proceedings if this phase of the proceedings really starts a new file.

PN6

THE VICE PRESIDENT: I'm proposing to continue that previous file and continue the marking of exhibits and you may rely on that exhibit that was filed at the earlier stage.

PN7

MR NOLAN: Thanks, your Honour.

PN8

THE VICE PRESIDENT: Mr Nolan, I'm not sure that we received an outline of submissions from you.

PN9

MR NOLAN: Is that right?

PN10

THE VICE PRESIDENT: We received the witness statement of Mr Newnnam and a witness statement in reply and there was a clause attached. We did make inquiries as to whether there was anything else and we haven't received an outline of submissions.

PN11

MR NOLAN: There was an outline of submissions dated 5 March 2007. Certainly the other side has got it.

PN12

THE VICE PRESIDENT: We did receive a message that the other side had it, had something but we haven't received it.

PN13

MR NOLAN: I apologise for that. Looks like something has fallen through the cracks. Perhaps we can make some arrangements to get another copy. I didn't bring a spare copy with me. Excuse me, your Honour. I'm sorry, your Honour, I don't seem to be able to hunt one up but we'll make arrangements for a copy to be made and supplied to you as soon as we're able to do that. Perhaps we can get somebody to go downstairs and get a copy made.

PN14

MR KENZIE: If the Commission would forgive the underlining, but it's only underlining, I think generally, we can make a copy available. That probably should be done

PN15

THE VICE PRESIDENT: Thank you, Mr Kenzie.

EXHIBIT #N4 OUTLINE OF SUBMISSIONS DATED 05/03/2007

PN16

MR NOLAN: Thank you, your Honour. I'm grateful to Mr Kenzie for that. I should just refer briefly to that outline. Your Honour, as we say in the outline, this phase of the proceedings concerns itself with whether or not you ought to exercise your discretion to vary the agreement. We've filed the statement of Mr Newnnam, in fact there's now two statements. We refer to the principles which we say apply, being those principles that are extracted in the outline of submissions drawn from the decision of the Full Bench in the Telstra case and that passage will be a passage with which you're familiar and we've given particular emphasis to some parts of that passage.

PN17

We go on to say that in this present case it's, we would think, beyond argument the mutual intention of the parties was to give effect to the terms set out in that letter of agreement that's been earlier exhibited and so on, but we say in relation to these issues the parties are in complete agreement regarding the application of operation of the relevant clause. That has occurred in a succession of certified agreements and we point to the fact that it's only been Qantas' change of heart, as we've described it, during 2006 which has led to the present dispute. We would have it that Qantas has really endeavoured to exploit the uncertainties in the pre-existing clause and we say that there's an overwhelming case to vary the agreement in the light of that quite significant departure from the past practice against the background of the clause. We there refer to the appropriate principles from CPSU v Telstra regarding the basis upon which the Commission should approach an application for variation.

PN18

Then we make some further submissions about what we say was the mutual intention of the parties with respect to the way the clause had been applied historically and we partly draw on that earlier letter, 4 July 1983 letter. We go on to say that the Full Bench has made it clear that once the mutual intention of the parties has been ascertained, it would be unusual for any other considerations to weigh in favour of the variation which was inconsistent with the original intention of the parties and we say that no countervailing considerations can really credibly be advanced in the light of the historical picture.

PN19

We conclude by saying it follows then the task really is for the Commission to give effect to what has been the original intention of the parties in the way it's been applied and the approach they take to the application of the clause in the agreement. We say the appropriate way to do that is to give effect to the variation that we propose. That's in essence what the outline says.

PN20

As we've indicated, we've filed two statements from Captain Newnnam and I propose to call Captain Newnnam to be cross-examined. It might be convenient to note that those two statements have been filed in the proposed meals and accommodation - altered meals and accommodation clause. Having said that it might be convenient now to call Captain Newnnam to have those documents marked and some other documents that we'll introduce through him when he's in the witness box. Unless there's something further, I propose to call Captain Newnnam.

PN21

MR KENZIE: I'm sorry, your Honour, could I just indicate just before that happens, we have noted that annexed to the application when it was filed originally, at least in relation to the copy that was given to us, there was a proposed series of clauses. Annexed to Captain Newnnam's original statement there is a document indicating the proposed clauses and those are not identical and the clauses that are appended to Captain Newnnam's statement depart in significance in some respects from the application. Captain Newnnam's statement appears to have proceeded on the basis of an assumption that the clauses that are appended to his statement, as opposed to the clauses in the application, are relevant to the proceedings and the matter, I think, needs to be crystallised which it hasn't been.

PN22

THE VICE PRESIDENT: Yes.

PN23

MR NOLAN: I agree with that. Might your Honour give us a couple of moments just to double-check those documents because as I understood it, it was intended that they be the same, the same document would be filed. Certainly I had no consciousness of a different document having been filed.

PN24

THE VICE PRESIDENT: To me there was no change between the original application and the document appended.

PN25

MR NOLAN: When you say the original application, that's the document that was appended to - I'm sorry, the original application being the original application filed in the matter.

PN26

THE VICE PRESIDENT: Yes, in August 2006.

PN27

MR NOLAN: Yes. There certainly was a change and the change that we presently propose is the change that was contained in the document appended to Captain Newnnam's statement.

PN28

THE VICE PRESIDENT: Mr Kenzie is saying it's appropriate to crystallise what you were seeking and the basis of it.

PN29

MR NOLAN: Yes, well, what was intended to be crystallised, if you like, was the proposed clause as it was attached to Captain Newnnam's statement and if there's any confusion about that, I apologise.

PN30

THE VICE PRESIDENT: You're effectively seeking to amend the application too.

PN31

MR NOLAN: That's so. We're pressing the proposal in the clauses appended to Captain Newnnam's statement.

PN32

THE VICE PRESIDENT: Is that sufficient clarification for your purposes, Mr Kenzie?

PN33

MR KENZIE: Certainly, I don't contest it. It's better to be dealing with one document.

PN34

MR NOLAN: Sorry, I thought there might have been some confusion about whether there was another document floating around and I wanted to make sure there wasn't. Can I call Captain Newnnam then to the witness box.

<MICHAEL ANTHONY NEWNNAM, SWORN [10.19AM]
<EXAMINATION-IN-CHIEF BY MR NOLAN [10.20AM]

PN35

MR NOLAN: Captain Newnnam, could you state your full name and address, please, for the record?---Michael Anthony Newnnam (address supplied).

PN36

For the purposes of your evidence-in-chief in this matter you prepared a witness statement consisting of numbered paragraphs going up to 5.5 and dated 27 February 2007. Is that right?---That's correct.

PN37

Do you have a copy of that with you in the witness box?---I don't, no.

PN38

We might just get you that. That had an attached proposed clause 34, meals and accommodation?---That's correct.

PN39

You now have that statement and the attachment?---I do.

PN40

Do you say to the best of your knowledge and belief the contents of that statement are true?---That's correct.

PN41

Might that be marked and the attachment marked.

EXHIBIT #N5 WITNESS STATEMENT OF CAPTAIN NEWNNAM DATED 27/02/2007

PN42

MR NOLAN: For ease of reference might I ask your Honour to mark the proposed clause 34 as a separate exhibit.

EXHIBIT #N6 PROPOSED CLAUSE 34

PN43

MR NOLAN: Captain Newnnam, you've also caused to be prepared another statement and that was a statement in reply to the affidavit of Mr Hailes filed in this proceeding. Can I just show you a copy of that. That's a statement, as I indicated, dated I think 2 April 2007 and that consists of an introductory paragraph and then about 12 pages containing responses to various paragraphs in Mr Hailes' witness statement. Do you see that? Do you say to the best of your knowledge and belief that the contents of this statement are true?---That's correct.

PN44

Can that be marked, your Honour.

EXHIBIT #N7 WITNESS STATEMENT IN REPLY OF CAPTAIN NEWNNAM DATED 02/04/2007

PN45

MR NOLAN: Can I show you another document and this is a table that you've assembled that consists of three pages, one of which is headed up Qantas Air Crew Accommodation List Pre-2006 and another one is headed up Qantas Air Crew Accommodation New Hotels After 2005. Is that a tabulation that you put together for ease of reference that draws on the various hotels ratings systems to which you've made reference in your statement?---That's correct.

**** MICHAEL ANTHONY NEWNNAM XN MR NOLAN
PN46

Might that be marked, your Honour. I've only given a copy to Mr Kenzie before the proceedings started this morning. Perhaps if he's not had a full opportunity to consult that it could be marked, subject to any later objection.

PN47

MR KENZIE: I've no objection, your Honour.

EXHIBIT #N8 QANTAS AIR CREW ACCOMMODATION LIST PRE-2006

PN48

MR NOLAN: Captain Newnnam, you've also produced a bundle of documents in a manila folder. Can you just have a look at that for us. That's a bundle of documents, the first of which - I should indicate, your Honour, I apologise for this because it has only come into my possession this morning but what I propose to do is get an index prepared for the bundle so that it makes it a bit easier to refer to. This bundle commences with a document headed up Meals and Accommodation which is an extract from the enterprise agreement and then it has a copy of the - I think there's a bit of duplication unfortunately, your Honour, it's got a copy of that table that I handed up to you before and it has some other - - -

PN49

THE VICE PRESIDENT: A different date at the top.

PN50

MR NOLAN: I'm sorry?

PN51

THE VICE PRESIDENT: It's got a different date at the top, this particular document.

PN52

MR NOLAN: Yes, I think it's a different page. It's just around in a different order.

PN53

Then it has, Captain Newnnam, copies of the meal allowances in local currency 2005 and 2006 and then a document that sets out the cabin crew meal allowances?---That's correct, yes..

PN54

Then it has a hotel and travel index classification system and the definitions taken from that guide. Then it has a list of the URLs that refer to the various - one in particular that refers to the Holiday Inn at Golden Gate. Then it has a printout from an open list that deals with the Holiday Inn, Golden Gate, San Francisco, it has other URLs on the following pages dealing with the Holiday Inn, San Francisco. It has a letter dealing with the Doubletree Alana Hotel in Honolulu. It then has some correspondence regarding meal allowances that pass between you and Qantas and then it has some photographs. You might just explain to his Honour the significance of those photographs?---The significance of the photographs is just an attempt, I suppose, to show the standard of current meals that are being given to crew which would reflect that the meals probably aren't of a first class standard compared to what's served on the aircraft to our first class passengers.

**** MICHAEL ANTHONY NEWNNAM XN MR NOLAN
PN55

There is then a document headed up First. Is that a list of the meals given to the tech crew?---Sorry, could you repeat that.

PN56

The document that's like a printout from a computer, is that a list of meals given to the tech crew?---That's correct. That's the printout that the cabin crew get notifying them of the meals that have been loaded for the crew and it just gives a brief rundown of what they're providing to us.

PN57

THE VICE PRESIDENT: Is that after the photos?---Yes, it is, your Honour.

PN58

MR NOLAN: The next document is in the same vein, is it? That's another crew meal list?---It's page 2.

PN59

Page 2 of that same printout?---Of that same document.

PN60

Then there's a photocopy from the menu handed out to first class passengers?
---That's correct.

PN61

Then there's a bundle of documents which is an exchange of correspondence regarding long haul meal allowances, one to the Flight Attendants Association, one to Mr Jennings of AIPA and then a letter from AIPA to Mr Hailes on this topic and a further letter from AIPA to Mr Hailes on the same topic. Is that right?
---That's correct. Just prior to that letter there's also - I took a photocopy of the menu from business class as well, just to give an example of first class and business class.

PN62

I see, all right. I'm sorry they've come up in this way, your Honour.

PN63

THE VICE PRESIDENT: I'm not sure that I've got everything in the same order.

PN64

MR NOLAN: What I might endeavour to do is put an index together of the documents so that everyone has got the same list.

PN65

THE VICE PRESIDENT: Yes. Do you want the bundle of documents marked at this stage and you can have it back to copy and file at some stage.

PN66

MR NOLAN: Yes.

PN67

MR KENZIE: There obviously won't be - this is not the sort of case in which there will be any objection, I'm sure, neither is there any real protest, but I've only just seen this material, as has the Commission. It might be described as a
grab-bag of material which it would obviously be necessary for me to show at some stage to Mr Hailes and it may have an implication in terms of some of the matters that I'm in a position to put to Captain Newnnam.

**** MICHAEL ANTHONY NEWNNAM XN MR NOLAN
PN68

THE VICE PRESIDENT: Yes, indeed.

EXHIBIT #N9 BUNDLE OF DOCUMENTS IN MANILA FOLDER

PN69

MR NOLAN: That's all of the evidence as far as we're concerned. I'm sorry, there is one other. There's a folder of documents from the URLs to which
Mr Newnnam has made reference. I understood that you'd got a copy of this. It's in a plastic folder and it's entitled Supporting Material to the Witness Statement of Michael Anthony Newnnam of 27 February 2007.

PN70

THE VICE PRESIDENT: No, we didn't receive that. We were told we were going to but it never arrived.

PN71

MR NOLAN: Can I hand up that.

PN72

MR KENZIE: Could I indicate to your Honour that like your Honour we have only just seen this material as well which is in the same category.

PN73

THE VICE PRESIDENT: Perhaps a little bit further ahead, Mr Kenzie.

PN74

MR NOLAN: I apologise for that.

PN75

Captain Newnnam, you've seen that folder and that contains the printouts of various of the URLs to which you referred in your earlier statement. Is that right? ---That's correct.

PN76

Might that folder be marked, your Honour.

EXHIBIT #N10 FOLDER OF SUPPORTING MATERIAL TO THE WITNESS STATEMENT OF CAPTAIN NEWNNAM

PN77

MR NOLAN: That's all of the evidence then, your Honour. Given that Mr Kenzie has only received some of this in the last little while, perhaps it would be appropriate for a brief adjournment to allow those documents to be looked at before he cross-examines.

PN78

THE VICE PRESIDENT: You don't have any further evidence-in-chief?

PN79

MR NOLAN: There's no further evidence-in-chief.

**** MICHAEL ANTHONY NEWNNAM XN MR NOLAN
PN80

THE VICE PRESIDENT: You're in a position to commence cross-examination?

PN81

MR KENZIE: I'm certainly in a position to commence cross-examination, your Honour, but it is plain to me from a brief look at the material that at least some of it would intersect the material that I was going to cross-examine on. Could I suggest this, that if we were given a very brief period we would be in a position to make a proper assessment and I only need a brief period for that purpose. Then, if I'm confident that I would be in a position to proceed with the cross-examination - but it may be that the nature of the material might need a little bit - more examination. So if your Honour would give us perhaps 10 minutes I can at least run this material before our people and give your Honour an indication but I will be in a position to cross-examine.

PN82

THE VICE PRESIDENT: Is 10 minutes sufficient or do you wish to make a preliminary assessment?

PN83

MR KENZIE: Perhaps I suggest 20 minutes might be better. There's a range of material, your Honour.

PN84

THE VICE PRESIDENT: We will adjourn for approximately 20 minutes. Perhaps Mr Kenzie you can indicate when you're ready. We'll be flexible about that.

PN85

MR KENZIE: Thank you, your Honour.

<SHORT ADJOURNMENT [10.22AM]
<RESUMED [11.00AM]

PN86

MR NOLAN: Your Honour, before the cross-examination starts, can I just indicate to you, that grab-bag of documents in the manila folder, the second and third sheet of those is another version of the proposed clause 34. Just so that we're not confused about anything, I would ask your Honour just to put a line through those couple of pages because that's not relied on at all.

PN87

THE VICE PRESIDENT: It's the second sheet on the back of the first page?

PN88

MR NOLAN: Yes, that's right. You'll see it's headed up Meals and Accommodation and it's got Latest Incorp Time in Port so if that sheet and the next sheet can just be struck through.

**** MICHAEL ANTHONY NEWNNAM XN MR NOLAN
PN89

THE VICE PRESIDENT: Yes. Thank you, Mr Nolan. Mr Kenzie.

<CROSS-EXAMINATION BY MR KENZIE [11.01AM]

PN90

MR KENZIE: Captain Newnnam, do you have a copy of the annexure to your first statement which is exhibit N6, detailing the nature of the provision that AIPA seeks to introduce?---Sorry, I'm not sure I understand.

PN91

Do you have a copy of exhibit N6, which is a copy of the clause that you seek in these proceedings, the variations?---If you're referring to the requested amended section 34. Is that - - -

PN92

Yes, the bundle of clauses that you seek in the - - -?---That's correct.

PN93

You've got a copy of that in front of you?---Yes, I do.

PN94

Before coming to matters more generally, if I can I just want to ask you some questions about some of those matters. Firstly, are you generally familiar with the application as it was originally filed with the Commission and the clause that was originally sought?---Generally?

PN95

Yes, and I think Mr Nolan has said this morning that the clause that is now sought, appended to your statement, involves some departure from that. Correct?
---That's correct.

PN96

I just want to just to actually come to the parameters of the proceeding. If you have that clause in front of you, would you agree with these things: firstly, if you look at clause 34.1.1, you are seeking to have in that clause added a reference to the applicable Australian Tax Office formula, correct?---That's correct.

PN97

You are also seeking to incorporate an express reference to the 1983 agreement?
---Correct.

PN98

You are seeking to remove the reference to the allowance as specified in company manuals?---That's correct.

PN99

Correct?---Yes.

PN100

That, although I don't think you need to go to the detail, is a - there are changes there from the form of 34.1.1 in the annexure to the original claim?---The - if you're talking about the additional changes, I don't believe 34.1.1 has been actually changed from that paragraph in the annexure - in the additional one. That should still be the same.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN101

34.1.2 I suggest is the same as the change - the clause sought in the application originally but is a new clause when compared with EBA7. Is that correct?---It is a clarification, if you like, on what's stated in EBA7.

PN102

34.1.2 purports to define first class accommodation. Is that right?---It attempts to define first class.

PN103

Yes, whereas first class is not defined in the EBA?---No, that's correct.

PN104

Then 34.1.3, this now provides that the company will ensure that a flight crew member is not required to share a room and I think you'll agree with me that the existing form of the EBA provides to the effect that the company will use its best endeavours - - -?---Make every effort, correct.

PN105

So that you seek to add an obligation there to provide a guarantee in relation to a room as opposed to the company using its best endeavours. Would that be correct?---It was my understanding it was part of the contract that was - in every hotel contract anyway so I just seek to have that formally put in the certified agreement.

PN106

Leaving aside what might actually be the case in relation to hotel contracts, but focusing on the EBA, you would agree with me that what you're seeking to do there in relation to 34.1.3 is to change the EBA so that instead of there being a provision for the use of best endeavours, you seek to introduce a guarantee on the part of the company that that will happen. Is that correct?---That would be correct.

PN107

34.1.4. is this the case that you are seeking here to pick up and include a series of - a prescription that designates a means of determining first class meals firstly, both in relation to breakfast and lunch by reference to a café style restaurant menu or equivalent. Correct?---Correct.

PN108

Then for dinner to incorporate a provision that the next higher category restaurant menu operated by the hotel shall be used?---Correct.

PN109

There is the insertion there of a requirement that when you come to dinner that the next higher category restaurant menu, being one operated by the hotel, shall be used?---That's correct.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN110

You seek to incorporate in the agreement a requirement that the reference point be a restaurant menu operated by the hotel itself. Is that correct?---That's correct, based on past practice.

PN111

I think at least one of the issues or one of the hotels which is the subject of dispute at the moment involves a dispute as to whether there can be utilised by Qantas a restaurant within the hotel complex that is not actually owned by the hotel but an independent franchise?---That's correct, yes.

PN112

That's the Bonaventure in Los Angeles. Is that correct?---That's correct.

PN113

AIPA's position has been in relation to that that it is not appropriate to have recourse to that hotel in that instance because - that restaurant in that instance because it is not operated by the hotel itself. Is that correct?---That's correct., yes.

PN114

You desire to change the form of the agreement to ensure that there be a connection between operation by the hotel and the identification of the restaurant. Is that so?---That's correct. I believe that was implied in the previous letter of agreement.

PN115

Then you seek a further requirement or insertion that if the hotel does not have restaurants that meet this criteria, a mutually acceptable external restaurant shall be agreed between the company and pilots or their representatives?---That's correct.

PN116

Firstly, you seek to identify in that clause a position in which a hotel doesn't have restaurants that meet what's called this criteria. What do you understand by this criteria to mean?---From the past practice when a hotel we're staying in hasn't been able to provide a menu which conforms with the letter of agreement from 1983 if, for example, I think the Sheraton in Los Angeles they had a bar restaurant there so we chose to select the Cheesecake Factory in that instance as an external acceptable. So the restaurant inside the hotel didn't conform to the formula so it was agreed on in that external restaurant.

PN117

But by the criteria, so we understand our terms, you are in fact seeking to pick up the 1983 approach?---Yes, reflect - yes.

PN118

What you contemplate in those circumstances is, if the hotel doesn't have a restaurant that is able to comply with that criteria, a mutual acceptable external restaurant should be agreed upon between the company and pilots or their representatives?---That's correct.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN119

The proposition that you're seeking to insert in the agreement is one that in the circumstances contemplated needs a further agreement as to what would be a mutually acceptable external restaurant to be arrived at?---That's correct.

PN120

In relation to the agreement, you are seeking in addition, as I understand the text, to introduce the notion that that agreement shall be made between the company and pilots or their representatives. Is that an intentional addition as to who must feature in the making of that agreement?---No, no, it's not intentional. It was purely my words. I was attempting to seek a clarification. I would be happy to have that changed if it was a sticking point.

PN121

Yes, there's no magic in that?---No, not the intent at all.

PN122

Thank you. You go on to seek in 34.1.4 a description of the calculation of the meal allowance to be in accordance with the formula set out below. This is a formula, can we take it, that is based on the matters that arise from the text of the 1983 letter?---Yes. We just attempted to modernise it, if you like, and make it a little bit more user friendly.

PN123

Precisely. What you're doing is, you are acknowledging in the draft that the 1983 letter is in certain respects not apposite to meet current standards. Correct?---I believe there was problems with its interpretation. Some of it was .....

PN124

Leave aside its interpretation. Some of the dishes that were identified - it's now nearly a quarter of a century ago - are dishes that - time has moved on and Peach Melba is no longer with us, for example?---Sadly, yes.

PN125

I'm going to bow to Mr Nolan's culinary skills at some stage in this case, your Honour, but maybe not on that one.

PN126

In any event, I just want to get you to agree that in some respects you've had to attend to the inevitability that time has affected the 1983 agreement. Do you agree with that?---I would agree 100 per cent with that. I think the initial '83 letter of agreement was very specific and, if you like, a little bit inflexible in that it specified the actual type of meal that was to be selected, so all I attempted in this change was to make it a little bit more nebulous, if you like, but still give direction to the way the allowance would be calculated.

PN127

Again one can look at the detail, but you've added a reference for example, of entrée in (d)?---That's correct.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN128

You've dropped off the reference to dessert in (b)(iii)?---Correct.

PN129

You've added in (b) for example, to give rise to greater flexibility. Correct?
---Correct.

PN130

You will agree, apart from anything else, that the attempt that is made in 34.1.4 to define in relation to first class meals to provide a definition by the various means that I've been asking you questions about, is totally new within the EBA. There's nothing like any of this in the existing EBA?---No, it just - I suppose it's an attempt to provide a mechanism to actually calculate an allowance in lieu of first class meals which is in the certified agreement.

PN131

34.1.5, to go back to the document, is an attempt to incorporate a mechanism which contemplates for the change in menu prices?---It was - I admit it was a direct copy from the LOA from '83 just to reflect what had gone on in the past.

PN132

34.1.6 is in a similar vein?---Correct.

PN133

34.1.7 similar again?---Exactly.

PN134

You have then in 34.2 a provision for an annual allowance review. 34.2.1 is a guarantee in relation to the adjustment of allowances with operative date being 1 November and provision for joint discussions. You would agree that that's a new provision within the EBA?---That's basically a direct copy from the 1983 agreement as well.

PN135

But new to the EBA?---Yes, it is.

PN136

Do you suggest that, for example, the addition of 34.2.1 has anything to do with the uncertainty that was identified by the Commission in its decision as to the meaning of first class?---I'm sorry, I'm not quite - - -

PN137

You see, the reason that we're all here is because the Commission - I withdraw that. You understand that the nature of the exercise in which we're currently engaged is to discern whether the discretion of the Commission to deal with the uncertainty identified in the earlier decision should be exercised, and if so in what way. You understand the question?---I understand, yes.

PN138

What I'm asking you is, bearing in mind that the Commission determined that the reference to first class in the EBA was found to be uncertain, if not ambiguous, what you have to say about the insertion of a clause, for example in relation to annual allowance review that bears on the question of resolving that uncertainty. Do you say that it does?---In respect to guaranteeing that the quantum amount that has been derived from the formula will continue to provide a first class meal.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN139

It has to do with the maintenance of first class standards. Is that correct?
---Exactly.

PN140

34.3 deals with changes to hotel accommodation and again there is incorporated in 34.3.1 a reference to either the company and pilots or their representatives, and I take it that again the reference to representatives is not intended to broaden the thing?---No.

PN141

EBA7, you'll agree, currently provides 30 days' notice being required nominating a new hotel, allowing time for inspection?---The current EBA does not. It just says - it specifies 90 days notification prior to contract expiry.

PN142

There is a reference in the proposal to termination instead of the word "expiration" in EBA7. I take it nothing turns on that?---No. There's no intent behind the change.

PN143

Clause 34.3.1 contemplates free air travel and assistance?---That's correct.

PN144

It adds a precondition of agreement by pilots and their representatives?---Correct.

PN145

You agree that those are all additions to the EBA7?---Yes, that's correct.

PN146

I take it your position would be that the relationship between that and the resolution of uncertainty re first class is that the provision of free air travel and assistance and the requirement of a precondition by pilots would be incidental to the maintenance of first class standards?---Yes, that's correct.

PN147

That's the way you put it?---That's correct.

PN148

34.4 relates to changes to arrangements in respect of meals and apart from the reference to representatives there is an explicit inclusion of the words "so that agreement can be reached prior to any changes." Is that so?---Correct.

PN149

That is different to the application - first of all, that's different to the EBA?---It is different. I suppose, when I was trying to seek clarification of the certified agreement that I believed the intent of that paragraph, when it said confer, would imply agreement so I thought, in an effort to clarify, I would put that in.

PN150

You do understand, though, as someone involved in industrial affairs that there is a difference between conferring and agreeing?---Yes.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN151

34.5 I think the position there is that that's only - there's no change there other than renumbering of the clause. Is that correct?---Exactly right.

PN152

Could I then come to your first statement and you tell us in paragraph 1.1 that you are the allowances and accommodation representative for AIPA?---That's correct.

PN153

You've been in that position since around the end of 2005?---That's correct.

PN154

When, in particular, did you come into that position?---In, I think it was January 2006.

PN155

Is that a part-time position?---My wife doesn't think so but, yes, it is. My main job is being a pilot.

PN156

Your predecessor in the role was Captain Woodman?---That's correct.

PN157

Captain Woodman was a senior pilot?---He's a captain on 747-400.

PN158

He'd been around as a pilot for Qantas for about 35 years by the time he went?
---This is correct.

PN159

He was a very senior pilot in that respect?---Yes.

PN160

He had been in the post of allowances and accommodation representative essentially throughout the 1990s?---Through the 1990s, yes. Correct.

PN161

Really, he had been around through the 90s and until 2006 so he had 15 or
16 years, give or take in that role?---Yes, correct.

PN162

He was very experienced in the role?---Yes.

PN163

Insofar as Qantas was concerned, the position as you understand it, for many years was that Wayne Kearns was involved on the other side of the ledger. Is that right?---Yes, a bit of continuity, yes.

PN164

As the manager of flight operations he had carriage of meals and accommodation for Qantas?---Correct.

PN165

Again, he had a great deal of experience in that role?---Correct.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN166

He, likewise, went out of the picture in 2005?---Exactly.

PN167

There was, really, on both sides of the ledger a changing of the guard at or around that time. Is that correct?---Correct.

PN168

In paragraph 1.3 of your statement you talk about some disputes between AIPA and Qantas. Firstly, you refer to the accommodation in San Francisco because of a disagreement in interpretation of first class and you also identify hotels in Honolulu and Canberra. Did you have any knowledge of the role of Captain Woodman in relation to the San Francisco dispute when you came on board?---The dispute?

PN169

Did you know that Captain Woodman had played a role in relation to that - - -?
---The dispute actually occurred after Richard Woodman had departed his role as accommodation representative.

PN170

I see, all right. You have no knowledge of Captain Woodman having examined the hotel in question?---I believe he did examine the hotel on behalf of Qantas at the time. While he was on sleep in Los Angeles, I believe he flew up.

PN171

You're aware of Captain Woodman's views in relation to the suitability of the hotel?---Yes, yes, I am aware of that.

PN172

Was Captain Woodman's view in relation to the suitability of the hotel was that it fundamentally met the requirements?---No, that's not my understanding.

PN173

Do you understand that his position was that there was some issues as to noise, location and air-conditioning in the hotel?---Correct, and he also said it was a trade off. He believed the standard of the hotel was probably in question but he believed in a trade off situation crew would probably prefer to stay in town than at the alternate hotel.

PN174

Indeed, the view that Captain Woodman was expressing there, on your understanding, was symptomatic of the traditional approach to making determinations about accommodation as between AIPA and Qantas. Correct?
---I believe he and Captain Kearns would confer if there was a point of contention.

PN175

Because look, when decisions have to be made about appropriate accommodation for pilots, pilots and flight crew, but pilots in particular have very particular needs in relation to accommodation matters, you'll agree?---Correct.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN176

I mean there are obviously concerns about the maintenance of appropriate standards in terms of the overall, what might be described, quality of the accommodation, matters going to stars, diamonds or whatever one wants to talk about but there are other very significant issues from the point of view of pilots and their representatives that must be accommodated in terms of providing appropriate accommodation, you'll agree?---Exactly.

PN177

Again, those requirements will have the capacity to vary in terms of their importance or intensity, depending upon the environment with which one is dealing. Correct?---I wouldn't say they would vary. It's either acceptable - the hotel is either acceptable from the noise or the other points of view, or to some extent it isn't. I mean, it's not a clear cut line.

PN178

Firstly, let me suggest some things to you before we proceed further. In particular circumstances an issue or issues like noise might be of particular concern?---Yes, it is, yes.

PN179

There are some cities, for example, that are obviously cities where noise plays a role?---More prevalent.

PN180

I mean, there are clear differences between international areas where the city is quiet and areas - for example, some American cities which are notorious for having noise throughout the night, that's well known to pilots?---That's correct, yes.

PN181

San Francisco would be in the range of things a pretty noisy city, you would agree?---It is.

PN182

In some particular locations, security will come to the fore in very particular ways?---Correct.

PN183

It has to be accommodated in relation to the negotiations that take place between AIPA and Qantas in relation to the suitability of accommodation. Correct?---I believe the security issues are probably considered more initially by Qantas. I believe they have a security department that considers that and we then obviously inspect it to see if we agree, but that's correct.

PN184

I mean, Qantas has had to move accommodation, for example, because of proximity to embassies in the past, are you aware?---I'm not aware of that.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN185

Not aware. In relation to the Indonesian accommodation at the moment there is a particular arrangement that involves security for staff?---Correct.

PN186

I'm not suggesting not first class accommodation but accommodation that has to accommodate that issue as an essential?---That's correct, yes.

PN187

There are issues such as localtional issues that are of importance to both AIPA and Qantas in relation to the housing of - or may be, depending upon port. Do you agree?---I'm not sure I understand where you're going.

PN188

It's my fault, Mr Newnnam. That question is not clear enough. The position may prevail that flight crew would prefer to live temporarily, to stay in accommodation that has proximity to certain areas within a city or the airport and those matters may be important to AIPA and the pilots?---Yes, I believe that goes to sort of gaining rest and recreation so the location is important as far as gaining rest and recreation while you're in port.

PN189

On other occasions the issues of locational preference are based not on proximity to the airport but considerations of desirability on the part of pilots, for example, wanting to in certain environments be in a particular locality downtown or in some other particular area for example?---I don't actually select the hotels. Qantas selects them but I believe due consideration is given to that within boundary, budgetary constraints.

PN190

Yes. And the arrangements that have had to be made between Qantas AIPA over time have involved discussions in which these and other considerations have had to be factored into the mix in order to come up with accommodation that is suitable, do you agree?---I can't speak for what happened with Richard Woodman. I'm not aware of discussions that he had in regard to that. All I can say is from my personal point of view I've been given a list of hotels that we're going to move to or to inspect and then after that position we sort of - I raise my concerns.

PN191

Thank you. But the one that I've asked you about, the San Francisco episode which involved an inspection on behalf of Captain Woodman, your predecessor, involved Captain Woodman telling you in very clear terms, didn't it, that what was involved in relation to the approach to the hotel had involved issues of trade off?---Well, I don't believe Richard was in consultation if you like as far as an AIPA representative. He was more going from the company's side.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN192

No, but forget whose side he happened to be representing at the time. Captain Woodman was a person with tons of experience from AIPAs point of view in relation to the issue of appropriate accommodation?---Correct.

PN193

And the views that he was expressing to you in relation to this issue, the San Francisco Hotel, was that from his perspective that the hotel on a trade off basis was within the range although it had some issues, is that not so?---That was his point of view, yes.

PN194

Okay, thank you. The second location that you - I'm sorry, the third location you identify in paragraph 1.3 is Canberra. Now, Canberra is a short haul destination and not a long haul destination, is that so?---That's correct. It was just one of the hotels that we've been in dispute with.

PN195

But not a hotel that is relevant to the proceedings?---Not covered under the long haul agreement, that's correct.

PN196

Yes, thank you. And Honolulu, that is a hotel that became relevant in or around October 2006 when Qantas confirmed that the crew had to move into the - were to move into the Double Tree Alana Hotel, is that correct?---Correct. We did stay in some temporary accommodation for a while.

PN197

Yes. That was because - that arrangement was because Qantas had to move because of the arrangements that existed in relation to the previous hotel were no longer available to Qantas?---That's what I was informed.

PN198

And of course this is another issue that has to be accommodated in relation to the housing of pilots and cabin crew. There are issues that have to be confronted in terms of the availability of hotel space to airline crew. You're aware of that as an issue, I don't suggest of any particular importance on any occasion, but an issue that has to be confronted by Qantas?---Correct.

PN199

Because we are dealing with arrangements that have to do with housing, depending on location, not insignificant number of crew over a protracted period of time?---Okay.

PN200

Depending upon the circumstances of hotels, flight crew have varying degrees of welcome in terms of the hotel industry. In other words, they are more welcome at some time than others, bearing in mind the circumstances of the hotel?---Sorry, you're saying that the hotel itself is more welcoming?

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN201

Yes, that from a hotel point of view, depending upon the time and the circumstances of the hotel, they may be either anxious or not anxious to house air crew, is that - - - ?---I suppose that would be correct, yes.

PN202

Yes. And from time to time in your experience is faced with the difficulty or prospect that although it would like to have its staff stay in particular hotels, the hotel simply says there is no further accommodation for you, you'll have to move?---I believe there's also a cost consideration as well.

PN203

Yes, okay. All right. And in any event, the Honolulu situation that you discussed, the hotel that was historically used was the Illikai, I-l-l-i-k-a-i?---Correct.

PN204

And that hotel would presumably not have been at the top of any star rating although adequate but had a very considerably attractive location to flight crew?
---Correct, yes.

PN205

And notice was given to Qantas in relation to that around June 2006, do you accept that or you don't know?---I'm not aware of the exact date or I couldn't confirm the exact date.

PN206

And would you accept that - were you informed by Qantas that they were having difficulties in providing replacement accommodation at Honolulu because of the high degree of occupancy rates in Honolulu at the time?---I was informed that, correct.

PN207

Something like 85 to 90 per cent occupancy in Honolulu at that time?---I'm not aware of any figures. I was just told it was difficult to find accommodation.

PN208

But you wouldn't have been surprised at what was being said because these would be the sort of issues that would have to be addressed whenever you have a change of accommodation in circumstances like this?---That's correct.

PN209

So when you are housing flight crew there are a whole host of considerations that have to be borne in mind in terms of coming up with a decision as to appropriate accommodation, do you agree?---From Qantas' perspective?

PN210

Yes?---Correct.

PN211

And from the perspective of AIPA and pilots there are particular considerations that depending upon location and circumstance would be regarded of significance by them?---They're of a consideration but they certainly wouldn't be my prime considerations.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN212

Okay. Well, they wouldn't be your prime considerations, but you would accept that looking at it from the point of view of flight crew that considerations like location might, depending upon circumstances, be of very great importance?---For other crew, yes, certainly.

PN213

If you offer the flight crew a seven star hotel 50 kilometres from the airport but there is an adequate hotel much closer, you know from the position of your members that there will be many of them who would say, look, we want to go for location or a place where we can get a good night sleep, for example?---They definitely want a good night's sleep, yes.

PN214

Okay. Now, could I just suggest to you that as a matter of history there's nothing unusual about issues arising as between AIPA and Qantas as to particular aspects of hotel accommodation that is being discussed, there's nothing new about issues being raised between the parties about matters like this?---I'm not aware exactly of what's going on with Richard Woodman and Wayne Kearns. It's not something that was sort of a matter of record if you like.

PN215

Yes. And can we take it from that answer that in fact when you came in you've really not been in a position to focus on the practices of Captain Woodman in relation to matters such as those that I've been asking you about in the past, would that be a fair assessment?---I suppose when I came into the position I suppose my consideration was more of considering the Civil Aviation Orders in providing adequate rest and ensuring that crew got rest. So they were my main considerations. I was aware from my 23 years in Qantas of the standard of hotels they experienced and obviously locations, so I had experience of a first hand nature of the type of hotels we'd stayed in in the past. I wasn't aware of necessarily the process that went on in the acceptance of those hotels and there was obviously some hotels along those 23 years that I didn't think were acceptable. But when I took on the role I tried to look at it as more satisfying the Civil Aviation Orders, making sure crew get adequate rest and then, you know, hopefully a good location as well or other consideration, but primarily concerned with those.

PN216

Over that 23 years it will have been apparent to you from your own experience that you would have stayed at hotels from time to time that I think to pick up your expression, you would have thought were of questionable standard?---Well, there were some hotels that I thought didn't provide adequate rest, that were either excessively noisy or had inappropriate block out curtains and I certainly put reports in on those hotels to Richard Woodman letting him know that I thought they weren't adequate.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN217

Okay, thank you. Now, you may not know the answer to this but could I suggest to you that over the years numerous issues arising out of questions such as that, suitability of particular aspects of hotel, have been habitually resolved by Qantas and AIPA by agreement?---It would be reasonable to assume that.

PN218

Sometimes it has been not possible by that process to reach agreement as between the parties and the Commission has been - the Industrial Relations Commission has had an involvement, for example, in Buenos Aires, are you familiar with that?---Yes, I believe there was a disagreement there.

PN219

Yes. Now, in paragraph 1.5 of your statement you say that at least the disputes that you've identified in paragraph 1.3 they have arisen because of the uncertainty which the AIRC has now found exists because of the use of the words first class in the certified agreement?---Lack of definition of, yes, correct.

PN220

Well, no look, I don't want to read too much into the sentence, Captain Newnnam, but obviously those disputes predated any finding of uncertainty the Commission?---I actually believe the current problems that we're having are peculiar to post 2005.

PN221

Okay. So not dating from any finding of uncertainty?---No, I believe it's because of probably the departure of Captain Wayne Kearns who was on the flight offside who had an understanding with Captain Woodman of what constituted first class and with his departure somebody else has taken over the role and is now having to interpret the certified agreement and that's I think caused a departure from past practice.

PN222

Tell me, Captain Newnnam, would you accept that what the position that you've just advanced in relation to Qantas has application in relation to AIPA, namely, that Captain Woodman for the last 15 years has been applying this agreement in a particular way with Qantas but that the practice from AIPAs position has changed?---No, I don't.

PN223

No?---No.

PN224

You wouldn't accept that. And is there any particular reason the
circumstances - - - ?---Yes, just - - -

PN225

Can I just finish the question?---Sorry.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN226

Is there any particular in circumstances where I think you've agreed that you've been in no position to assess the way in which Captain Woodman has approached these matters, any particular reason you say that?---Just I've stayed in these hotels for 23 years. I suppose I've come to an understanding of what first class means over that period and I'm aware that over that 23 year period what I would expect a first class hotel to contain and be so - - -

PN227

Your expectations haven't always been met over those 23 years, I think you've told us?---They've been met on most occasions. On very rare occasions there's been some I'd probably disagree with.

PN228

Yes. And - I withdraw that. You tell us in paragraph 5 that the disputes that have arisen, at least from your perspective, have been brought about by Qantas changing its position from that which previously applied, is that your perspective?---Just from somebody else interpreting their definition or what they believe first class is.

PN229

Okay. Now, first of all, you understand the person who stepped into Captain Woodman's shoes for the purposes of making determinations like this is Mr Hailes who's giving evidence in these proceedings?---I think you mean Captain Kearns.

PN230

Captains Kearns, I'm sorry?---Yes, that's correct.

PN231

And you're not in any position to know what degree of communication existed as between Mr Hailes and Mr Kearns in relation to the appropriate approach to apply?---That's correct.

PN232

For all you know Mr Hailes has communicated with Mr Kearns in relation to the appropriate approach and is attempting to apply it?---I can only go on the facts as they speak for themselves.

PN233

Okay. In paragraph 1.6 you say that you don't want to be in dispute and you seek clarification of the agreement to more clearly define first class, so removing any perceived uncertainty and preserving the standard clearly set by past practice and you then refer again to longstanding practice. Now, can I suggest to you that your understanding of past practice, that is, the practice in negotiation as between
Mr Kearns and Captain Woodman, is severely compromised by virtue of the fact that you don't know what that practice was?---I don't think I'd use severely compromised as a word.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN234

Well, do you agree - - - ?---I'm not aware of the exact discussions that went on between them but I mean I would have a general understanding just through discussions I've possibly had with Captain Woodman in the past.

PN235

And I suggest to you that Captain Woodman would have said, as he did in relation to San Francisco, that decisions as to accommodation have to be made with a number of considerations in mind including compromises?---Correct, that's what he said.

PN236

And that that was his approach to the matter?---Yes.

PN237

So that a hotel that he might have otherwise thought might have been problematic or on the borderline might be actually regarded from AIPAs point of view as an appropriate hotel for accommodation because of other considerations that were of importance to pilots like security, their capacity to get a good night's sleep and location and other matters?---I would assume he would the sleep ahead of every other consideration. It would be, yes.

PN238

Of course there's lots of first class hotels however one describes it, seven stars, where depending upon the location you mightn't be able to get a good night's sleep, do you agree?---That's correct.

PN239

Not suitable for pilots but answers the description?---Correct.

PN240

Now, you say in paragraph 1.6 that you're seeking to preserve the standard clearly set by past practice. In terms as clear as you can muster can you tell us what that past practice was?---I suppose my personal experience of hotels we'd stayed in and once I got into the role, I think it's one of the attachments, I did a survey of the ratings of all the various hotels to see how they were rated prior to 2006 so I could get a feel for the general standard of the hotels that we had been accommodated in and I know that most of those hotels that were listed had been long term hotels, we'd been staying in them for quite a while, and then I just compared that with internet information from the same sources on what had transpired in 2006.

PN241

Okay. And I'll come to the comparisons that you draw in a moment. But you don't - that's what you mean by past practice, is it, and attempt to distil it by reference to the standard, reasoning back from the standards of accommodation that you can see from the record?---I suppose past practice would be just in my experience in the 22 years of the various hotels. That was what I meant by the past practice.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN242

Yes. I mean you've got 22 years of experience yourself in actually staying there?
---Staying in these hotels.

PN243

You've obviously got recourse to the sorts of records that you've put before the Commission today?---Correct.

PN244

In terms of exhibits and your affidavit and reference to standards to which we'll come. And it is to those that you appeal when you talk about past practice but not the actual practice as between AIPA and Qantas of how to implement the award requirements of first class, that's correct, isn't it?---That's correct.

PN245

Thank you. And again the same is true when you talk about longstanding practice in 1.6 the position is the same?---More referring to standard than the processes.

PN246

Thank you. Now, you say that the proposed variations and I've asked you some questions about them, would reduce disputes as between Qantas and AIPA?
---That was my intention.

PN247

Yes. And it's certainly your contention that if that happened it would reduce disputes, that's your position. In the course of your research and development for this case you've obviously obtained, if not before, familiarity with the Buenos Aires case run as between AIPA, the FAA and Qantas in the Commission?---No, that's not correct.

PN248

I see. You've just - - - ?---I was aware of the Buenos Aires case but I haven't actually studied the particulars of that case.

PN249

So you have no awareness as we stand here of AIPAs position advanced to the Commission in that case?---No.

PN250

You have no awareness?---No.

PN251

Pardon me, your Honour. Did anyone ever tell you that in those proceedings AIPA submitted to the Commission that no particular definition of first class accommodation was applied to technical air crew and it was desirable that that situation continue as specific definitions could become inflexible and unworkable?---I was aware that Captain Woodman's preferred method of negotiation and dealing with Captain Kearns was to leave, if you like, the uncertainty in there, that was his preferred method of doing business.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN252

And that position applied for many years while Captain Woodman was negotiating for AIPA?---Certainly.

PN253

Yes, thank you. And you have no reason to believe, do you, that the approach that Captain Woodman was applying during the time that he was there was any different to the approach that AIPA had applied in the years before Captain Woodman came on board?---I couldn't comment on that.

PN254

Thank you. Now, we'll come to the detail of your proposals in a moment, but your approach, you will agree, is one of attempting to introduce some prescription with a view to reducing disputes in a way that is in contrast to Captain Woodman's approach, correct?---I didn't actually consider - I was just looking at the uncertainty and a way to remove it. I didn't actually consider how Richard Woodman went about it.

PN255

Let me put the question to you in two parts. Firstly, you agree that you're attempting to deal with the problem as you see it by introducing some more prescription into the award in the interest of resolving disputes?---We've reflected what's go on in the past as far as - yes.

PN256

Okay. Now, the second part of the proposition that I put to you is that having in mind the matters that I have asked you about, you accept that that approach is not the approach that AIPA has been advancing to Qantas in the time of your predecessor?---Sorry, could you repeat that?

PN257

That approach is not the approach that AIPA has been applying vis-à-vis Qantas during the time of your predecessor, Captain Woodman?---If you're saying we've suggested amendments that we're putting into the certified agreement or suggested amendments, I suppose the amendments I put in there was based on my belief of the agreements that would be reached between Captain Kearns and Captain Woodman, that they had this understanding of what first class was, so I was merely trying to reflect how I believed they had a common understanding on.

PN258

Could I just put two propositions to you, firstly you are currently seeking to apply prescription to define first class?---That's correct.

PN259

Captain Woodman's position before you was that it was undesirable to do that?
---He preferred to just leave it uncertain.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN260

Now, just as a matter of fact would you accept that if you attempt to define the requirements for first class in a manner that is too prescriptive you might run up against the problem that you might not have a hotel in a particular site that meets the relevant requirements?---No, I don't agree with that.

PN261

You don't think that that is a practical possibility?---No, no, unless there was virtually a very, very limited amount of hotels to choose from in a location.

PN262

And do you have any locations like that?---Not that I'm aware.

PN263

Do you have any concern that if you apply a prescriptive standard that you might run up against difficulties that arise because those hotels that might meet the standards for one reason or another do not want to accommodate flight crew?
---It's possible in I suppose both.

PN264

And do you think that there's a prospect that if you apply a prescriptive standard you might run up against a problem in that the available hotels in a particular locality, although willing to accommodate flight crew, simply may not be able to accommodate flight crew?---If you're meaning that they don't have the spare rooms, that's possible.

PN265

Yes. If you applied a - I withdraw that. Do you accept that if you applied a prescriptive standard that you might run into problems by virtue of the fact that the particular needs of pilots might not be able to be met in relation to the remaining hotels that were willing and able to accommodate flight crew?---I wouldn't agree that that's a certainty or otherwise.

PN266

But do you acknowledge the prospect that you've got a pool of hotels to choose from in a particular environment that there may or may not be problems in relation to availability but there is a need to accommodate considerations like security, quiet, absence of construction and a host of other considerations, do you accept those things are real?---That's correct, yes.

PN267

Do you acknowledge that if you attempt to apply a prescriptive standard that says look, you must without more, fasten upon four diamonds otherwise you're in breach of the agreement, that you run into practical problems, do you acknowledge that at all?---Well, that would only be a problem if you assumed that four diamonds was above the previous standard we were using. In my previous experienced we'd been experiencing four star hotels or four diamond hotels, I would assume that it was possible previously to find four star hotels that could satisfy all those requirements. So I believe it's been possible in the past. All I've done in attaching four stars to first class is try to define, if you like, using a more widely used rating system what I believe first class is.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN268

I think you've told us, we'll come to your documents in relation to history in due course, but I think you've told us that that history such as it is has disclosed a range of accommodation from three stars upwards, has it not?---Correct.

PN269

So it hasn't always been possibly apparently by one means or another to accommodate that standard, correct?---That's correct.

PN270

I suggest to you that that's because there are so many issues to be addressed that there are swings and roundabouts that have to be applied in relation to the provision of accommodation for pilots in a variety of locations, would you accept that?---I would accept that.

PN271

Now, in paragraph 1.8 you refer to first class as defined in the dictionary and you refer to the adjective first class having one meaning of the highest quality, synonymous, excellent, fantabulous, is that your suggested longstanding practice or meaning of first class?---No, I was just merely bringing out a definition which I got from the internet to show one of the definitions I suppose if you like that obviously somebody thought was correct.

PN272

And you wouldn't have any awareness of how the Commission, for example in the Buenos Aires case, has treated the submission that first class in the Qantas context has been - you wouldn't have any knowledge as to how the Commission has responded that first class means that?---The only reference I'm aware of from the Commission as far as first class was Commissioner Watson's reference to saying high standard in his reply.

PN273

Could I come now to that part of your statement where you deal with the 1983 letter of agreement in paragraph 2.1, Captain Newnnam. Firstly, you accept, don't you, that EBA7 picked up language that is first class, entitlements to first class accommodation and meals that had been in agreements and awards covering AIPA for very many years?---That's correct.

PN274

And you've had the advantage of reading Mr Hailes affidavit in these proceedings to which you've responded and you see that Mr Hailes identifies in his affidavit the history of usage of similar language?---Correct.

PN275

In agreements from paragraphs 9 to 11 and awards in paragraph 27 of his statement?---Correct.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN276

And plainly the language in those agreements and awards goes back well before 1983?---Correct.

PN277

So you would accept that those agreements and awards applied for at least 16 to 17 before the 1983 agreement?---Correct.

PN278

They stem I think from the pilots dispute in the 1960s?---67 or something.

PN279

Days of your - now, you of course were not involved in negotiations that led to either the 67 award or the 1984 agreement, or indeed EBA7 I take it?---That's correct.

PN280

But your contention is that the 1983 agreement now represents the obligation of Qantas in relation to accommodation as well as meals?---No, not as far as accommodation is concerned. I believe the 83 agreement just gave a formula to provide an allowance in lieu of meals and that's something we've used for the last sort of 23 years. But it had no reference to accommodation.

PN281

Thank you. Now, you will agree that - you've acknowledged in paragraph 2.4 that the letter of 1983 was never incorporated into the long haul agreement or any of its predecessors?---That's correct.

PN282

You know from your own experience that there is a practice described by
Mr Hailes of the incorporation of letters of agreement into Qantas certified agreements?---That's correct.

PN283

And you know that the purpose that AIPA and Qantas have in incorporating those letters into those certified agreements is to constitute part of the agreement?
---That's correct.

PN284

And you know that in relation to the 1983 letter in relation to the pilots agreements or awards that was never done?---I believe the 83 agreement was tested in a Federal Court case about allowances with regard Mr Ward and it was found in favour to uphold what was in the letter of agreement so from that perspective I believe it's probably a little bit more weight than, you know, because it hasn't been included in our certified agreement, but it has been tested in the Federal Court.

PN285

Okay. Now, you have an awareness I think from your statement in reply that the position in relation to the flight attendants on the other hand is one in which there was an attempt to at least to provide in an inclusive basis a description of the definition of first class for certain purposes?---I'm not aware, I just - the only thing I’m aware of as far as cabin crew is that they had an additional thing put in the certified agreement referring to the letter from 1983 as far as allowance calculations.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN286

Yes. And the flight attendants agreement dealt with by Vice President Ross in 1999 had a provision in it that stipulated in terms that the 1983 agreement on the formula for calculating meal allowances will not be departed from except by mutual agreement, you're aware of that?---Yes, I have read that.

PN287

And you may or may not have been aware but were you aware that that same agreement which provided for the provision of first class accommodation for the payment of an allowance in lieu of provision of accommodation attempted a definition of first class accommodation as including but not being limited to a number of - - - ?---No, I wasn't aware of what was in there.

PN288

Okay, thank you. I'll make that document available for the Commission. Perhaps I can do that now?---If I could just add to that regard?'

PN289

Certainly?---It has only been in recent times that technical crew and cabin crew have stayed in the same hotels. Quite often we've stayed in different hotels so there's no guarantee, if you like that technical crew and cabin crew will be staying in the same hotels.

PN290

The print was F0850, your Honour, and I tender it. I'm not sure whether your Honour would regard it as necessary to tender a print of the Commission.

PN291

THE VICE PRESIDENT: Yes, I won't mark it separately.

PN292

MR KENZIE: I make it available to the Commission.

PN293

THE VICE PRESIDENT: Thank you. I wonder whether that was the code for the agreement and the print is actually R2 - - -

PN294

MR KENZIE: Sorry. The barrister's curse is that the marker that marks on the key document only the key passages. I think your Honour's right. I can't read mine so if it has those entries in the top left hand corner are the actual - R245 - 445.

PN295

Now, in paragraph 2.4 of your statement you say that -

PN296

Without exception since 1983 Qantas and AIPA have used the LOA and the formula contained within it to calculate meal allowances.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN297

Do you see that? Do you see that?---That's correct.

PN298

Now, you - - - ?---Or as a basis if you like. As a base or a starting point.

PN299

As a starting point?---Correct.

PN300

Yes. As a guide for the purposes of finally informing the decision?---I believe it's the major contributing factor towards calculating the allowance. Any variance from there on would be in a degree to be conciliatory I suppose.

PN301

Okay. So just so we get our terms straight, notwithstanding that what you've said in paragraph 2.4, your understanding of the position is more appropriately one that the 83 agreement has been clearly regarded as the starting point?---Yes, my understanding is - - -

PN302

But not necessarily the end point?---Yes, my understanding is that Qantas gains automatically all the menus from all the hotels we've stayed in. They present the calculations at the beginning of the review and then my only other understanding as far as variances is when the menus don't pair up with the strict definitions of what meals should be provided and I believe there was a bit of toing and froing as far as I think the original document said meat and three veg, so we would say, you know, okay, meat and one veg. But that's the only variation if you like that I'm aware of as far as that letter of agreement.

PN303

And what about the choice of restaurants that provide a basis for analysis?---It's my understanding that in all but four cases the hotel owned and operated - or the restaurant owned and operated by the hotel had been used in those calculations.

PN304

What sort of circumstances, are you aware, prompted a departure from the position?---Yes, yes. One of the examples was the Sheraton in Los Angeles where the only restaurant in the hotel was a bar with pool tables and a sort of a bar type menu in which case it was mutually agreed between Qantas and AIPA or Richard Woodman to use the Cheesecake Factory which is just down the road. I believe for New York there was a requirement or they originally - Qantas were going to put us in the Lexington Hotel. Richard Woodman said we'd prefer to stay in the Millennium which is a slightly better hotel and agreement was reached to use the menus in the Lexington instead of the Millennium which was apart from the strict use of hotel restaurants and I believe this also happened in London as well. The restaurant in the Millennium Gloucester we stay in at the moment has an Asian style restaurant which doesn't mesh in with the formula so I believe the Bailey Hotel restaurant is being used for that calculation.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN305

What do you do when you are dealing with a restaurant in a place like Japan where there may be no restaurant but which serves meals at all which comply with the 1983 formula?---I haven't had - unfortunately I haven't been part of a review yet which I was hoping to be part of one at the end of 2006 so I'm not aware of what has gone on as far as Japan is concerned.

PN306

I was really putting a hypothetical. I'm not suggesting an actual. Are you aware of - - - ?---I'm not aware. I'm not aware of what's gone on.

PN307

And you don't know whether there would be such a situation?---I would imagine there would be reference to the 1983 letter agreement and I believe most of the hotels we've stayed in in the past in Japan have had western type meals anyway.

PN308

Okay?---Certainly the ones I've stayed in.

PN309

Yes. My hypothetical may not be factual?---Yes. No, no, they have western food there.

PN310

In the New York example that you gave us, Captain Woodman, the position was this, wasn't it, that the position of the flight crew was that there was a great preference for the Millennium Hotel?---I'm not aware that there was a great - certainly there was a preference by Captain Woodman to stay there. I don't believe the pilots were even aware of the choice if you like. It was just a fait accompli when we were told we're staying at the Millennium.

PN311

The choice by Qantas of the Millennium over an alternative involved the potential for increased financial cost to Qantas in accommodation terms I mean?---I'm not aware that there was a difference. I believe it was just a preferred hotel. I'm not aware that the Millennium was more expensive than the Lexington. All I'm aware is that the restaurant prices in the Millennium are more expensive than the Lexington.

PN312

Yes. I want to suggest to you that in fact it was circumstances where Qantas effectively saying look, if you want to stay at the Millennium then it would be appropriate because this is in a sense a concession to look at the restaurant in another hotel and that that was agreed ultimately?---I'm not aware of what went on between Captain Kearns and Captain Woodman.

PN313

Okay, all right. Are you aware of any involvement that Mr Hailes might have had in relation to those negotiations?---No.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN314

All right. So your position is that you are aware of four occasions at least where the agreement hasn't been applied?---I believe - - -

PN315

Or the practice?---I believe the practice is there's only few exceptions where we've departed from using the hotel restaurants.

PN316

You can't say whether there are any more but there are four that you know of?
---That's correct.

PN317

And that don't appear - can you suggest any particular formula that provides a basis for departure or was it simply depending upon the particular circumstances that apply in each case?---I believe in the case of the Sheraton in Los Angeles because it was a bar restaurant it was acknowledged by Qantas that it couldn't provide a first class dinner. That's my understanding of it. So as far as the other ones I'm not aware of the particulars but certainly that one was because it was a bar restaurant it was mutually agreed to select a restaurant outside.

PN318

Okay. In the case of the Millennium Hotel there was certainly no doubt about its capacity to provide a first class dinner, was it?---No, that's correct.

PN319

But nonetheless another restaurant was chosen?---I believe a concession was done to put us in the Millennium instead of the Lexington, correct.

PN320

Thank you. Now, could I come to the aspect of meals in paragraph 3 of your statement. In paragraph 3.1 you say that -

PN321

By mutual agreement and well established practice of 20 years first class meals has come to mean the following -

PN322

And then you set out the meaning and that is:

PN323

For breakfast and lunch the menu in the lobby, café or restaurant of a first class hotel has been considered suitable for providing first class meals.

PN324

Could I stop you there, is it your understanding that the meaning in relation to breakfast and lunch is that you identify the menu contained in the lobby, café or restaurant of a first class hotel and move to the position that that is suitable to provide first class meals, so you've got the job of identifying a first class hotel, is that right?---My understanding is that on the provision that the hotel was itself first class that a first class breakfast and lunch could be gained in the café restaurant if you like of that hotel.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN325

And then for dinner to be considered first class -

PN326

Longstanding past practice has been to select the next higher category restaurant menu above the café restaurant.

PN327

?---I believe in the past those are the menus that have been obtained by Qantas in the calculation. They've obtained those.

PN328

Now, you say that first class meals has come to mean that now, is that right?---I suppose that is the way the allowance is calculated to reflect if you like first class meals in lieu.

PN329

Yes, yes. It's the way allowances have generally been approached?---Calculated.

PN330

With a view to coming u with a dollar sum that is the allowance?---That's correct.

PN331

And that the desirability of coming up with a dollar sum is clear and of importance to AIPA because quite understandably for a variety of reasons about 80 per cent of pilots overall would receive the money in terms of allowance not utilise the first class dining facilities, would that be correct?---They certainly receive the allowance. Where they spend their allowance, you know, I can only talk for myself.

PN332

It's a matter for them?---Yes.

PN333

But you're certainly aware that very many pilots would operate on the basis that they receive the money allowance and don't actually eat in the accommodation which is provided?---That's correct. I don't believe there's ever been any intention to do that.

PN334

No, no. And everyone proceeds on the basis that that is a perfect entitlement on the part of the pilots to conduct themselves as they wish and receive an allowance as so calculated. In paragraph 3.2 you tell us that -

PN335

Restaurants have always been used which are under the control of the hotel.

PN336

And I think you'll agree that although you start off the paragraph in that way you immediately qualify it?---Correct.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN337

So that always doesn't mean always?---Correct.

PN338

But generally?---Generally, yes.

PN339

And then you say that -

PN340

That practice has been varied where the hotel does not have a restaurant which can provide the appropriate meal, in which case a mutually agreed restaurant is selected outside the hotel for the purposes of calculating allowances.

PN341

?---Correct.

PN342

Now, that's the thought that you're trying to pick up in the variation to the agreement that I asked you some questions about earlier, is that not so?---That would be correct.

PN343

And I think I put it to you that if that amendment was made it would still require - first of all it would require an understanding between the parties that the hotel in question could not provide an appropriate meal?---Sorry, could you - - -

PN344

In order to make the clause work you'd have to first assume that the parties were in agreement about the hotel being able to provide an appropriate meal in a restaurant under its control?---Correct.

PN345

And the parties may - it may not be possible to get agreement about that?---That's correct.

PN346

And then what your proposed amendment does is to say that if it is agreed in the first instance that an appropriate meal cannot be provided you then go to the next stage of saying that the parties must agree on an alternate?---That's correct.

PN347

So there is another process of agreement being required under the clause?---The first step would be using the hotel one if that's acceptable and if that's not acceptable, using what we've done in the past, selecting something that's mutually agreeable outside.

PN348

It looks forward to agreement at two levels and two stages?---Well, I suppose you'd only get to stage 2 if stage 1 proved unacceptable.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN349

And you'd only get to stage 2 if you arrived at a conclusion that there was no appropriate meal able to be served by a hotel with a restaurant under its control?
---That's correct.

PN350

And so first of all the clause would not permit Qantas to have regard in the first instance to a hotel - to a restaurant in the position of the fourth floor of the Bonaventure in Los Angeles where there was a restaurant in the facility but operated under a franchise by someone else, Qantas would not be permitted to do that?---That's correct.

PN351

You'd have to look somewhere else in those circumstances, correct?---Provided there was no restaurant in the hotel itself.

PN352

If the only restaurant being provided in a hotel that was being occupied by pilots was a restaurant which might be described as a fine dining restaurant, I think there have been issues about fine dining, would the AIPA position be that regard must be had to the fine dining restaurant?---No.

PN353

No?---No.

PN354

That would be another occasion where AIPA would accept that it wasn't an appropriate meal that could be provided and you'd be able to look outside?---No, no, I - - -

PN355

Well, what would you do there?---The hotel selection process is as Julian has mentioned in his statement, is quite lengthy in selecting the hotels. One of the considerations they give to the selection process is the costs of meals in the restaurant in the hotel. So having given that due consideration, the company given that due consideration, if they have selected that particular hotel then it would be my point of view that they have accepted the standard of that restaurant in that hotel.

PN356

So AIPAs position would be if Qantas came back in that environment and said that look, it's totally unrealistic to look at this hotel, this restaurant, it's a fine dining restaurant and it's just whatever might be said about first class, this is over the top, AIPAs position would be, well look, that just comes with the hotel you've selected, is that - - - ?---That's exactly correct, yes.

PN357

Thank you. Now, do you suggest that Qantas has ever accepted that proposition that if the only hotel available is a fine dining - only restaurant available is a fine dining hotel that that is the restaurant that should be used?---I'm unaware up until this particular case of the term fine dining ever being used in any previous hotels we've stayed in.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN358

Okay. In paragraph 3.6 you tell us that -

PN359

The process of using menus from the hotel accommodating flight crew has worked well for the past 23 years in simplifying the menu selection process and should be adhered to unless a suitable restaurant is not available.

PN360

?---That's correct.

PN361

And that's what you've tried to capture in the variation?---That's correct.

PN362

What is your definition of a suitable restaurant, is that just simply a restaurant that is in a hotel that happens to have been chosen by Qantas?---A suitable restaurant is one that would have a selection of food I suppose on it that would reflect I suppose the broad outline of letter of agreement from 83 that would provide suitable choice for the crew.

PN363

Do you mean the letter of agreement as modified to meet modern circumstances?
---Yes, exactly.

PN364

In paragraph 3.8 you refer to the Bangkok matter. Is that a dispute as to which of the restaurants in the hotel in question is to be looked to?---That's correct.

PN365

And Qantas's position is that there is a restaurant there which actually answers a description that would enable it to provide a service of breakfast, lunch and dinner?---That's Qantas's contention.

PN366

That's Qantas's contention?---Exactly.

PN367

And that's the subject of disagreement. Have you sought to resolve that dispute other than through negotiations with Qantas by reference to any form of dispute resolution machinery?---No, we haven't. It seemed at that point in time that when we said there was - why isn't the next higher category restaurant being used, and the belief was that it was acceptable, that it then came down more to this application I suppose, gaining clarification.

PN368

You see, could I suggest to you that the lengthy period of history in which reference to first class meals and accommodation have bee industrial prescription has not been generally attended by the requirement to go to third parties to resolve disputes, but it essentially has involved a history in which AIPA and Qantas and the flight attendants and Qantas have been able to reach agreement amongst themselves?---I believe that would be fair to say that during the period of which the same faces were negotiated.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN369

Yes. Indeed I think - I don't want to go to your reply statement generally at the moment, but you appear to acknowledge as much in your reply statement, paragraph 62, where you say that:

PN370

The absence of a definition may have worked well in the past but recent experience shows that the lack of definition now adversely affects the standard of hotels.

PN371

?---That's correct.

PN372

So you agree that this approach that has applied for many years, at prior to recently, has worked well?---That would be assumed, yes, correct.

PN373

Paragraph 3.9 of your first statement, you say that in relation to first class meals that:

PN374

AIPA has sought to remove this uncertainty and ambiguity by the addition of words to the clause which are in line with past practice.

PN375

And I've asked you about past practice. In fact you are seeking of course to amend various clauses, not just 34.1.1?---That's correct, yes.

PN376

Do you have Mr Hailes's affidavit in the witness box with you there?---I do.

PN377

And in relation to paragraph 46 of that affidavit Mr Hailes asserts that the disputes that you're having, the Bonaventure, Los Angeles, San Francisco or Bangkok, the disputes would not be avoided or assisted by the variation sought by AIPA because those disputes relate to the nomination of the restaurant rather than the formula set out in the 1983 letter. Do you agree with that?---I actually refer to that in my reply, quite a length reply, reference at paragraph 46, I didn't agree with that.

PN378

Yes. And that is because you say that you've actually attempted to pick up the practice that you've identified in your - - -?---I believe it is.

PN379

And transplanted into the - - -?---I believe the past practice was reflected with certainty in our certified agreement that those disagreement's wouldn't have taken place.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN380

Yes. You're referring there to the fact that in this respect you're not seeking to pick up the 83 agreement as such but you're seeking to nominate the matters relating to the choice of restaurant and the like?---That's correct.

PN381

I understand, yes, thank you. In paragraph 47 of Mr Hailes's affidavit he refers to a survey conducted by Qantas of the management, and that is the basis of the 20 per cent figure and 80 per cent figure that I was putting to you a little while ago. Have you ever seen that survey or the results?---No, I haven't.

PN382

You haven't. In paragraph 3.10 of your first affidavit you say that the uncertainty surrounding the definition of first class also extends to the actual meals provided while on duty in the aircraft. And you seek in your first statement to say that recourse to the standard of first class passengers would be a fair indication of what Qantas believes first class entails. And I think in your second, your affidavit in reply you go a little further and appear to suggest - I'll pick it up if I may - that the first class menu available to passengers would be available to crew, and here I'm referring to paragraph 48 of your statement in reply where you say, in response to Mr Hailes's statement:

PN383

I would ask why the obligation to provide first class meals to flight crew is completely different to the standard of meals provided to first class passengers.

PN384

And then I leave out the next sentence:

PN385

I understand that a sufficient variety of meals is provided to first class passengers to satisfy the requirement for crew to have different meals.

PN386

Do you see that?---Yes, I do, yes.

PN387

Now, you've read paragraph 48 of Mr Hailes's statement obviously which addresses this topic. He points out that on every flight operating crew members are provided with specially designed meals, you're aware obviously?---I'm aware what he's got in this clause, yes.

PN388

Yes. And that these meals have particular qualities that have been designed in consultation with your organisation to ensure they're balanced nutritionally and by reference to diversity?---I understand that the consultation took place in the past. Certainly it hasn't taken place since I've been in the chair.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN389

Okay, I understand. I think there's a reference to 2003 in your second affidavit?
---Sure.

PN390

But I'm coming to the process you see. What Mr Hailes is identifying, and you will agree with this I take it, that there is a process still in place that the meals provided to crew are provided on a basis that is designed to ensure they're balanced nutritionally and with diversity?---I believe that's the intent.

PN391

And there are requirements set out by Mr Hailes that the captain and the first officer are not allowed to eat the same meals in case of food poisoning?---Correct.

PN392

And similarly the second officer and flight engineer are required to eat different meals for obvious safety reasons?---That's correct.

PN393

So Mr Hailes also refers to the fact that there may be an excess of meals from first or business class available to them?---Correct.

PN394

Correct. Now, of course the position is there may not be an excess, indeed there may, depending upon the run or the circumstances there may not be anything available?---Correct.

PN395

If everyone eats the fish and not the meat and the like, such is life you'll agree?
---Correct.

PN396

So what we have effectively two separate regimes in relation to the provision of meals, both a regime in relation to the crew, the pilots, and a regime in relation to passengers?---Certainly two catering streams if you like.

PN397

And the requirements of Qantas in relation to the two streams are discernibly different?---Sorry, the requirements?

PN398

The requirements of Qantas in relation to the two streams are discernibly different?---I'm not aware of the requirements that go into the provision, if you like, of the first class passengers, but certainly whether it's - I would assume that Qantas don't want to poison their first class passengers either so I would assume that the same care in selection would have made it as, you know?

PN399

I'm certainly not going to suggest the contrary to you, Captain Newnnam. But you'll agree with this won't you, that the approach that Qantas, you acknowledge, must take in relation to providing food to its crew has additional requirements that are not applicable in relation to first class passengers. For example, the requirement that there be a particular nutritional value in relation to pilots' meals and a diversity?---Yes, I believe that is the intent, yes.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN400

But however much Qantas obviously cares for its first class passengers it is concerned with providing excellent service but not by reference to considerations of diversity in terms of what the passengers might thereafter eat or drink, correct?
---Correct.

PN401

And of course that, as far as the first class passengers were concerned, would include alcohol?---Correct.

PN402

But what Qantas is required to do in relation to the provision of meals for the pilots is to comply with its Civil Aviation obligations to ensure safety in operation?---That's correct.

PN403

So different sets of rules must necessarily apply to the two streams?---That's correct, yes.

PN404

Now, at least as at 2003 you understand from the evidence that you've seen that the process of flying in respect of pilots was one that had involved the active participation of AIPA?---That's correct.

PN405

You're not aware of any participation by AIPA since 2003?---No.

PN406

Are you aware of any process in which AIPA has sought to activate or reactivate those matters other than this proceeding?---I believe whenever we get an adverse report on meals they are certainly forwarded on to the company to make them aware of problems in various ports which occurs certainly from time to time.

PN407

You would accept wouldn't you that it would be completely impossible to proceed on a basis in which the pilots were entitled as a matter of right to the same first class meals as served to passengers without more?---No, I agree with that. That's not what I intended in that statement. It was just more a - if that was deemed an appropriate way to solve the problem of providing a first class standard of meal, then there's sufficient variety in the meals served to first class. But I wasn't implying that we should be using first class meals from the passengers. It was more just a reflection of standard I suppose.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN408

Thank you, yes. Well, you certainly wouldn't want to take that last sentence in paragraph 48 of your - or, sorry, that sentence in paragraph 48 of your reply to be a proposition that Qantas should ipso facto make those meals available?---No, that was not my intention.

PN409

Thank you. In 3.11 you talk about the uncertainty existing in relation to the provision of allowances in lieu of first class and the suggestion that cabin crew are treated more - or would be treated I think more beneficially if the allowance provided is in lieu of the provision of first class meals, do you see that?---That's correct, yes.

PN410

Reference to if. Does that mean that you're making - you don't know if that's the case, but you assert that there's an appearance of 10 per cent more allowances in many ports and that you would complain about that if that allowance was provided in lieu of the provision of first class meals?---That's correct. If the allowance is to be in lieu of first class meals I wasn't sure why there was a difference in the amounts if they're to reflect those.

PN411

Are you aware of the differences in relation to the processes of negotiation as between AIPA and flight attendants in recent years in relation to certified agreements and industrial matters generally?---As far as meal allowances?

PN412

Yes?---As far as meal allowances, I mean, I didn't partake in any of the reviews but I believe that for quite a while the flight attendants just as a matter of course took what was agreed between the pilots and the company, and subsequent to that I believe they started joining the discussions to have their input, but as a matter of course we sort of always used the same figures.

PN413

You're not aware of the flight attendants having gone out on their own?---In recent times, yes.

PN414

Thank you, yes. Now, it may be no more than a point of clarification, Captain Newnnam, but I wanted to just ask you something about the documents that form part of exhibit N9, which is the folder of documents, or the bundle of documents given to us this morning. Do you have that document?---I don't have it in front of me but I can - - -

PN415

I wonder if Mr Nolan can make a copy. And I'm going in particular to the two pages from that document which are both headed Long Haul Air Crew Meal Allowances, Local Currency, but one of them bears the written annotation, cabin crew, and one of them bears the written annotation, tech crew?---Correct.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN416

You've got those. Now, can you - and one of them says amended to 9 February 2007, the other says updated to 18 December 2006. Could I assume - correct me if I'm wrong - that these documents are in this bundle by reference to the point that you're seeking to make in paragraph 3.11 of your first statement, is that correct?---That's correct.

PN417

Could you just again just perhaps enlighten us as to what they say and the way in which they make some point about differentials that you rely on?---For example say the total meal calculation for Beijing for cabin crew is 864.80 and for pilots it's 694.60. It was more just an attempt to show that since the cabin crew had a review on 1 November last year that tech crew and cabin crew are now receiving different allowances and sometimes it's up to 10 or 15 per cent difference.

PN418

Is this no more than a reflection of the fact that there have been a review that reflects the latest round of negotiations with the cabin crew?---As specified in their certified agreement, yes, they received a review.

PN419

But this is really only a - and these reviews do not go forward with the unions progressing their matters simultaneously, they don't go forward together, AIPA and the flight attendants don't - - -?---Well, they did previously, but just recently in fact, as far as I'm aware, last year was the first time it's actually separated.

PN420

Yes. Can you just enlighten us as to the nature of these documents, the annotations at the top, cabin crew and technical crew, are they your annotations?
---They are.

PN421

And where do these documents in fact come from?---The cabin crew document I received as a fax from the Flight Attendants Association, the other document I printed off the Qantas intranet website which is made available to all crew.

PN422

And the written annotations that appear in relation to the cabin crew document are they your annotations or is that the - - -?---That was supposed to stay part of our documents. I was just looking at the differences, but yes, that's correct.

PN423

THE VICE PRESIDENT: I don't have any written annotations on my copy?
---No. That unfortunately has been passed by mistake to them. That's my page, my personal page where I was just collating the differences between the ports. It was just purely for my - - -

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN424

So the exhibit is not intended to have any annotations?---No. No, it's not intended to have any. That was just purely something I was doing last night.

PN425

MR KENZIE: But in any event there's no magic to it. If anyone wanted to sit down in relation to the two documents and do the same thing they'd simply add the pluses and minuses as you have?---Exactly, yes.

PN426

So there's no mystery to it?---No.

PN427

So is this the position, that relying on the materials that have been sent to you from the cabin crew you have discerned that in relation to certain sites, I think there are asterisks next to Beijing, Jakarta and Manila, you can identify some differentials?---I think there was differentials in most of them. I just highlighted the ones that had the largest change.

PN428

And that the cabin crew reflects a document updated to 18 December 2006. As far as you're aware the other document reflects a more recent round of negotiations?---Sorry, if you're referring to the one titled Tech Crew?

PN429

Yes?---I believe those figures actually haven't changed since probably midway through last year, August last year. The fact that it shows amended, I actually don't believe there's any substantial change at all. I think it's maybe just a reprint.

PN430

Thank you. Now, in paragraph 3.1.2 you refer to using the ATO allowance rates as a guide. Now, is this a reflection of the provision in proposed clause 34.1.1 which refers to the reference to the applicable ATO formula?---No, it's not.

PN431

It's not. It's something else. Why are you using the ATO allowance rates as a guide?---I was - in that paragraph I was just trying to point out that in the ATO rates they're based on total salary packages and that they vary depending on - that was the only point I was trying to show there, that the lower salary tended to get lower allowances, and that in this case it appears to be different.

PN432

I see. Could I then - I'm going to the subject of accommodation. I don't know whether your Honour - I'm happy to continue. I'm just going to another topic, that's all.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN433

THE VICE PRESIDENT: That's probably a convenient time, Mr Kenzie. We'll adjourn until 2 pm.

<LUNCHEON ADJOURNMENT [12.54PM]
<RESUMED [2.03PM]

PN434

THE VICE PRESIDENT: Mr Kenzie?

PN435

MR KENZIE: Thank you, your Honour.

PN436

Captain, could I take you to paragraph 4 of your first statement, paragraph 4.1, where you say that with regard to accommodation AIPA has attempted in its clarification of section 34 to lift the rating first class to the more commonly used star or diamond rating system. Now, that as I understand it is a reference to your proposed clause 34.1.2, is that correct?---Correct.

PN437

And you accept in paragraph 4.1 that the hotel rating system varies widely from one source to the next?---Correct.

PN438

But you say in that paragraph that it is hoped that a more consistent selection of suitable hotels would be the result if you require three independent sources to rate the hotels. And that is a reference to 34.1.2, the requirement that a hotel must get the required standard from a minimum of three independent sources?---Correct.

PN439

And then in paragraph 4.2 you tell us that the selection of four star or diamond has been arrived at by comparing the ratings of past hotels prior to 2006, and which you say by comparing two independent sources rated past hotels at, and then you give us a list of different ratings, 10 five star hotels, 17 four star hotels and two three star hotels?---That's correct.

PN440

Now, it follows from that does it not, before coming to the particulars, that whatever is meant by past hotels prior to 2006 it threw up a picture in which you had in different degrees a range of hotels from five stars down to three stars?
---That's correct.

PN441

And then you go on to say that:

PN442

Considering the past precedent where the majority of hotels are rated as four star this selection actually reflects past practice and does not impose any extra burden on Qantas.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN443

?---Correct.

PN444

And so what is put is this is it, that if you look at the figures that have been thrown up from what is described as prior to 2006, the majority of hotels fall at the four star level and so that is the level that is appropriate to be selected for the purposes of 34.1.2 where you talk about a minimum rating of four stars or diamonds?
---Correct.

PN445

Now, whatever is meant by pre 2006 you will agree, will you not, that the adoption of that clause which adopts what might be described as the median or most common approach is an approach which would remove the ability of Qantas to avail itself of the sorts of hotels that are within the path range, namely the two by three star hotels that you find there, correct?---That would be correct.

PN446

So it cannot be - you go on to say that clause 34.1.2 does not impose any extra burden on Qantas. What I want to suggest to you is that the extra burden that is imposed on Qantas by the addition of that clause is that it confines the range of hotels that the past practice has permitted Qantas for various reasons to utilise, would you agree with that?---I believe that the flexibility in the definition of - or the wording of first class previously has allowed Qantas the ability to possibly select the standard of a hotel which is below what is generally accepted. So yes, I suppose you could say it does limit, but there were sort of so few three star hotels previously that by far so much of the majority were above that. But I think when I reworked the figures it only worked out as one star - one hotel with three stars.

PN447

I see. So you've actually - - -?---I've subsequently reworked them on the latest listings.

PN448

Yes. Now, tell me this. Is the material in paragraph 4.2, is that related to the document that we now see as exhibit N8?---The material from 4.2 was done prior to the conciliation hearings back late last year. This latest information I did literally days ago.

PN449

When you say the latest information, by that you mean exhibit N8?---Exactly right.

PN450

Thank you. So that 4.2 is derived from material that you looked at late last year?
---From late last year, yes.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN451

And that threw up, according to the affidavit, two three star hotels, but you say on a reworking that should have been one three star hotel?---Exactly, yes. I mean, obviously I'm assuming that either the Yahoo or Travel Velocity altered one of them from a three star to a four star.

PN452

And so that in itself is a reflection of how ratings themselves can change over time?---I agree.

PN453

Yes. So you have a range of ratings of hotels internationally and the capacity for each of those ratings to also change?---It can reflect that or it could also reflect the varying quality of a hotel, whether a hotel starts to let itself go or actually starts to pick up its act which might warrant, you know, a regrading. So that's also possible.

PN454

Okay. So you would accept then, although you would say the utility or utilisation of three star hotels is not by any means less frequent, that at least to the extent that I'm putting to you that the addition of clause 34.1.2 would impose an extra burden on Qantas because it would deprive it of an opportunity to utilise hotels which fell within that description?---I suppose the only answer I can give you is that those three star hotels were selected or approved by my predecessor, and he for reasons of his own I assume possibly compromised the standard for another gain, so whether, you know, if we're talking into the future, whether I would be saying yes, those three star hotels are acceptable, would be a moot point.

PN455

Whether or not Captain Woodman was acting appropriately in the past?---Sure.

PN456

In selecting the range of hotels or agreeing to the range of hotels that he did, you would agree that to the extent that I'm putting to you - - -?---Yes, I agree.

PN457

- - - that clause 34.1.2 does not reflect past practice, correct?---Sorry, say that again.

PN458

Sure. That at least to the extent that I am putting to you where three star hotels were regarded as within the range, that the imposition of clause 34.1.2 would not reflect past practice?---I believe in the selection of a linking between four star and first class that if we're trying to define first class it would reflect past practice but it would, as you pointed out, exclude the selection of those three star hotels, correct.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN459

THE VICE PRESIDENT: Captain Newnnam, can I ask you how I interpret the three page document which is exhibit N8?---Yes.

PN460

The first page I have is headed Qantas Air Crew Accommodation List Pre 2006?
---Correct.

PN461

And that's a full page. Is there a second page to that?---There is.

PN462

With a total at the bottom. And that's got - - -?---That's the second page.

PN463

Yes. So under the Yahoo accommodation list none of those hotels are rated three star?---That's correct.

PN464

But under Trip Advisor one is?---That's correct.

PN465

And what's the other page?---The other - this page if you like for clarification, that was pre 2006, and the next page after 2005 reflects the hotel changes that took place during 2006.

PN466

So the new hotels added?---Yes, exactly, or where we changed hotels, and I have just rated them using the same rating agencies and also for clarification I've also put in the ratings from Hotel Travel Index.

PN467

Well, there's more three star hotels on that list?---Yes, exactly my point, yes.

PN468

And one rated by one guide as a two star?---Exactly. If I could clarify where I've got the column other, Yahoo and Trip Adviser didn't rate three of the hotels, so to get at a comparison I used another website which did rate those.

PN469

Yes, so you've always got two?---So at least we had two from each. And the rating from, I think it was Mobil for the Honolulu drew up a two star.

PN470

Yes, thank you.

PN471

MR KENZIE: Now, the questions I've been asking you so far, Captain Newnnam, have been about the study that you did in 2006 for the purpose of coming up with paragraph 4.2 of your statement?---Correct.

PN472

The Vice President has just asked you about exhibit N8 which is your more recent document as I understand your evidence, is that correct?---That's correct.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN473

Now, could the - in relation to exhibit N8 the first heading is Accommodation List Pre 2006, and the second heading is After 2005. Now, just so we can get some clarification here. The first page of exhibit N8, pre 2006, what is meant by pre 2006?---I apologise if I've chosen the words poorly there. I chose to word it that way in that pre 2006 related to hotels prior to, if you like, the departure of Wayne Kearns and Captain Woodman, and I originally was going to say 2006, but since then we've had some hotel changes or notifications in 2007, so I then decided to use the words after 2005, implying from early 2006 if you like to the present day.

PN474

Sorry, after 2005 is intended to mean?---It means from early 2006 to the present date.

PN475

Right. And pre 2006 covers what, or relates to what period?---To generate that list I took the accommodation list which is provided by Qantas from, I think it was mid 2005, and from that list just categorised the hotels with the various rating agencies.

PN476

So the position is that both lists look to a selection of hotels from a broad list of hotels that Qantas utilises throughout the world, is that right?---No, that's not exactly correct. The hotels I've used here where I've rated - unfortunately Hotel Travel Index didn't rate all hotels that Qantas went to, so I only gave comparative ratings from other agencies for the hotels that the Hotel Travel Index actually rated because there was nothing to compared to seeing there was no rating. But I think there was only about three hotels that they didn't rate.

PN477

So the pre 2006 list that you've got there is a list of some but not all hotels that Qantas house staff in, is that correct?---Sorry, is that - - -

PN478

Pre 2006?---Exactly right. The majority. It was all the hotels that were rated by Hotel Travel Index.

PN479

Okay. And the post, the after 2005 or early 2006 list is a list of, likewise, of a group of hotels that are included amongst the hotels that Qantas utilises for staff?
---In the second after 2005 list all I've done is list the hotel changes that occurred from early 2006 to the present day and just reflecting the standard of hotels that they are.

PN480

Yes. But it must follow that this is only part of the whole accommodation picture that exists within Qantas?---Well, the fact that I got these ratings from just the other day, if you like, the ratings of these hotels has remained the same. I've only split them up. I could have added these but the ratings would be exactly identical if you - I've only just put down the ones that have changed, but if I wanted to give a complete list of the hotels we stay in today you could just simply add the pre 2005 with the appropriate changes and the ports where it has changed.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN481

And the reference to the three star hotels that you got earlier in paragraph 4.2, where did they come from?---Which ports were they in?

PN482

No, what source did you use?---It was either Yahoo or Trip Adviser, I can't remember which group, but it was the same rating agency.

PN483

Okay. So if one - so that to the extent that the entries in, or the locations in the first page equate with the locations on the second and third pages you can get some idea of the change in relation to particular locations over that time?---Have I got an actual location of a hotel?

PN484

Yes. For example the Honolulu appears in both lists so you've got the Illikai on page 1 of exhibit N8?---Correct, yes.

PN485

And you've got the Doubletree Hotel on page 2?---Exactly. So the Doubletree replaced the Illikai.

PN486

And you can do the same thing for example in relation to Los Angeles. You've got the Bonaventure on page 1, on page 2 we have a reference to the Sheraton Downtown. Now, is that a replacement or is that simply another hotel that
you - - -?---That's an additional hotel.

PN487

It's an additional hotel?---That is being used at the moment. I believe there's actually no contract with the hotel at the moment, but it is being used as an overflow hotel, and I was asked by Qantas to do an inspection of it to check its suitability.

PN488

And Qantas uses what, overflow hotels to deal with particular exigencies, or how does an overflow - - -?---Los Angeles - well, they use overflow hotels when they're either notified by the hotel that for reasons beyond their control they're not going to be able to provide all the rooms that they're contracted to do, or I think in the Los Angeles case we've increased the number of flights in there and the hotel just plain can't - doesn't have the rooms, and still be able to provide a service to other people. So we've selected, Qantas selected the Sheraton as an overflow.

PN489

Bangkok appears on both. There we have in - pre 2006 we have the Queens Park Imperial four star, and we now have the Century Park four star, and the Trip Adviser advises three star, is that right?---But that was - yes, that's a change, yes. That was a change from the Queens Park to the Century.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN490

Yes, all right. And we don't have - are there any other ones that we can perform a like analysis with?---You can. The Manila is a change, a recent change. Basically Los Angeles is the only one where we have an additional hotel. All the other hotels mentioned in 2005 are replacements to existing hotels. So wherever you see a port apart from Los Angeles in the after 2005 one it has replaced the port on the pre 2006 list.

PN491

All right. So bear with me a moment. Mumbai appears on both I think does it?
---That's a replacement.

PN492

It's a replacement?---Correct.

PN493

And the Grand Hyatt Mumbai is the more recent, the hotel more recently used?
---Correct.

PN494

Are you familiar with the notion of the awarding of stars in addition to five stars in the hotel industry, anything more than five stars, six and seven stars?---I believe the hotel in Dubai has self classified itself as a seven star.

PN495

Seven star?---Whether its - I am not aware that Yahoo or Trip Adviser would classify it seven star, but I believe it self classifies itself as the only seven star hotel. But I'd have to check Yahoo or Trip Adviser to see what they've rated it as.

PN496

Well, it's classified as a five star by Yahoo but there's a blank in the column for Trip Adviser?---Sorry, which one are you using?

PN497

I'm using N8?---Yes. Which hotel are you referring to, Mumbai?

PN498

Yes?---Yes, Trip Adviser didn't rate it so I used another rating agency.

PN499

Yes. And just remind us again, the reference to other is in the third column, that's no other particular site, it's just a range of sites?---Where I possibly could I would try to use the same one, but as it turned out in that instance I believe they were three different sites just because of the location.

PN500

Do you see that if you look down from the second page of exhibit N8 to Tokyo, under HTI there is no rating. And if you look again at Johannesburg there is on page 1 there is no rating. Are you familiar with the notion - - -

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN501

THE VICE PRESIDENT: I think the second page really should be the third page.

PN502

MR KENZIE: Yes, I'm sorry, the third. I was looking at Tokyo, the Mercure Hotel, and the third column, no rating. And I was going to ask you this. In your researches did you frequently come across a situation in which a hotel was not rated or not yet rated?---There was only the three occasions, those three occasions where Trip Adviser and Yahoo didn't rate of all the hotels we do, but the Hotel Travel Index, the latest change there was two not rated, and prior to that I think there was just the one not rated by the Hotel Travel Index.

PN503

Tell me this. When hotels come on stream are they - there's a period of time that can frequently elapse when they're not rated?---You're talking about a new hotel?

PN504

Yes?---I would assume so, yes.

PN505

So does your system operate in relation to a hotel that's not rated?---I'd imagine if Qantas was considering a hotel that wasn't rated by anybody who is selecting it for crew accommodation, an inspection would be undertaken to see if it agreed with past practice and considered the appropriate standard.

PN506

But your clause wouldn't allow that to be chosen would it?---No, it wouldn't.

PN507

It doesn't matter how good the hotel was, your clause would preclude that from selection?---In that eventuation, yes, that's correct.

PN508

THE VICE PRESIDENT: Can I just ask, Captain Newnnam, the HTI ratings, I take it deluxe is above first class?---Yes, it is, your Honour. In the grab bag, as we - there's actually a list of the Hotel Travel Index. It's a shaded article and it lists I think from - it's this one here - it lists the order in which they're rated.

PN509

I see.

PN510

MR KENZIE: Could I also give your Honour a reference to annexure R to Mr Hailes's affidavit, which is the Hotel Travel Index which has a - - -

PN511

THE VICE PRESIDENT: And the reference in your summary, exhibit N8, doesn't include any below first class on the HTI scale, so there's no mention of first class includes limited service first class or moderate first class?---In the ratings that I've given them?

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN512

Yes?---No. I mean, when I did the comparisons there was no hotels that we stay in that were rated below first class by the Hotel Travel Index, correct.

PN513

Yes, thank you.

PN514

MR KENZIE: So in Yahoo and Trip Adviser, the sites that you've gone to and relied on which rate hotels in terms of star rating, is that correct?---I would hate to get tied to the word star. I think it's star or diamond I think I've mentioned somewhere else. I believe - I can't remember whether it's Yahoo or Trip Adviser might use diamonds instead of stars, but I believe the actual rating system, it's a five star or diamond system, so that's - I'm more referring to the five star or diamond rating system.

PN515

But you've picked up the star or diamond rating in your clause. Do you say that four stars relates to four diamonds and five stars relate to the five diamonds?
---That was my intention in the clarification of 34, that it says - I can't remember the exact wording but I believe it says rated four star and/or diamonds as appropriate to the location I think was how it was worded.

PN516

Okay. Now, in paragraph 4.2 just for a moment, you say that you arrived at the material by comparing two independent sources. What were those two independent sources? Were they Yahoo and Trip Adviser?---Yahoo and Trip Adviser, correct.

PN517

Thank you. All right. It must be the case that you're going to get a different picture about the hotels that appear in exhibit N8 depending upon the time that you choose for analysis, is that correct?---Sorry, I'm not sure I understand the question.

PN518

Well, the position in N8 necessarily is one that changes over time with different hotels, different contracts and different circumstances applicable to particular hotels, is that correct?---It would be fair to say if different hotels are selected over time that the ratings may change, yes.

PN519

And are you familiar with the notion that the pressures that might lead to turn-over of hotels concerning Qantas would be cyclical and responsive to economic conditions generally applying in different parts of the world? If that's not - I withdraw it?---Sorry, I'm not sure I understand it.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN520

You would accept that depending upon economic circumstances, the need to turn-over hotels may increase or decrease with the pressure on space, depending on the vitality of the tourist industry?---Are you referring to the number of tourists staying in those hotels or people travelling on Qantas?

PN521

I'm asking you whether you agree that the turn-over in relation to the position that you see in 8, the change in hotels and their ratings over time, would be affected in its volatility by economic circumstances, pressure on hotels in relation to room occupancy and the like?---I'm not sure.

PN522

You're not familiar. I won't pressure you in relation to that?---Sorry.

PN523

Tell me this. In relation to the first page of N8, the Hotel Mulia Seniman in Jakarta, is that a hotel in which security considerations play a role?---Absolutely, yes.

PN524

Are there particular features in relation to that hotel that are of significance to pilots from a security point of view?---I've personally never stayed at the hotel and I haven't done the inspection, so I'm actually not aware of what the hotel has as far as security measures, but I haven't had any adverse reports from pilots saying it's an unsafe hotel.

PN525

But you understand that there are security aspects that were responsible for the selection of that facility?---Exactly, yes.

PN526

The hotel in Manila, the Philippine Plaza Hotel, are you aware that in Manila accommodation was moved because of an issue in relation to proximity to the US embassy?---I was aware that it was moved for security reasons. I wasn't aware of the US embassy, but I was just informed that it was being moved because of security concerns.

PN527

Was there any particular reason why you have chosen Yahoo and Trip Adviser from the range of sites that would assist you in your inquiries?---The only reason - they almost selected themselves. When I was doing an internet search for the various hotels, Yahoo and Trip Adviser consistently rated all of the hotels. If I looked at any of the other sites, they tended not to rate as many hotels as extensively as Yahoo and Trip Adviser.

PN528

So it was the range that they offered, was it?---Yes. They were certainly more extensive when we're talking about all over the world. Some rating agencies like Mobil and AAA in the States are very popular, but Yahoo and Trip Adviser tended to have a world type of coverage.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN529

Now, your proposal as I understand it would allow for selection of a hotel if it achieved the required standard, that is four stars or diamonds from a minimum of three independent sources?---Correct.

PN530

Now, that would be three independent sources, would it?---Well, it's achieved a rating of first class and/or four, so it could achieve a first class rating from one agency and two four stars from two other different agencies. That was the intent there.

PN531

But, you see, you have referred in exhibit N8 to two sources and I think in exhibit N10 which is the folder that's been tendered by Mr Nolan this morning, there is a reference to travel guides in the early part, in tab 1, to the Mobil travel guide that you've just mentioned and the like?---Correct.

PN532

Is it contemplated that the clause 34.1.2 could be satisfied by inquiring around and selecting from any one of a number of sites that has anything to say about rating hotels, stars, diamonds or first class or the like and as long as you come up with three from any source, that would meet the clause?---That's correct.

PN533

So if Qantas came up with three from any source whatsoever, that would meet the standard, notwithstanding the fact that AIPA came up with 15 that rated the hotels on a more inferior scale?---That's correct.

PN534

You don't make any assertions about the relative validity of any of the ratings, but you simply rely on the fact that if you appeal to a range of ratings and you come up with three, then there must be something to be said for the rating - - -?---For three to concur, if you like, certainly they would be in agreeance. You would say that there's some common theme there.

PN535

In paragraph 4.3 of your statement you talk about the amendments to paragraph 34.1.3. This is the provision for insurance that applied for a member who is not required to share a room and a requirement that the company would ensure that the contract with its accommodation provider specifies that the room provided should have certain features?---Correct.

PN536

Including a double bed, air conditioning and the like?---Correct.

PN537

And be subject to minimal noise?---Yes. I put that in there in reflection of the definition under the Civil Aviation Orders of what the acceptable accommodation is.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN538

You see, you understand from the Civil Aviation Orders that the regime is imposed on Qantas independent of the EBA that requires Qantas to provide certain matters which go to safety and other matters?---That's correct, yes. It was probably - I probably didn't need to include that in there. I was just trying in that paragraph to reflect what was taken as a given if they were going to be - and to a large extent, a lot of our members sort of asked, you know, what are the requirements for a hotel to be accepted.

PN539

Yes, and, for example, you would agree that looking at those requirements like noise, black-out curtains and even a double bed, there would be plenty of first class hotels that don't provide one or more of those items?---I'm not sure if there would be plenty, but there may be some first class hotels which may not provide black-out curtains. It tends to be the major one that they don't expect people to be sleeping during the day, so it's not a big concern for first class hotels.

PN540

So to that extent, you are providing an additional requirement here over and above simply providing a first class hotel, you are insisting if this be included, that it must be a first class hotel that answers a particular description, is that so?---In my inspections of hotels, when I'm asked to inspect a hotel by Qantas to judge its acceptability, that is one of the features that I judge it on and if it doesn't have appropriate black-out curtains which will create a problem for crew trying to sleep during the day, then I'll bring that to Qantas's attention that it's not acceptable on that regard, so if you like, it's a requirement now for the hotel to be acceptable, but it's just not in the certified agreement.

PN541

You would accept, don't you, that things like the requirement for a double bed or minimal noise are not synonymous with first class hotels, but they are something that are of importance to pilots and are factored in to any negotiation?---They're certainly of importance to pilots, yes.

PN542

And where appropriate, you'd expect them to be factored into the negotiations which you yourself have described?---Correct.

PN543

So in paragraph 4.5 you say that when a search is carried out for first class hotels in San Francisco, the two web sites found do not list the HIGG amongst their first class hotels. What are we to take from that?---When I did a search, I just did an in depth search of first class hotels in San Francisco and it came up with two web sites which rated hotels. At that particular time, I wasn't aware of the hotel travel index. I did a search and it came up with two web sites which classified hotels by standard classifications, if you like, instead of the star and diamond and of those two sites that I found that classified them in like standard, if you wish, the Holiday and Golden Gateway wasn't amongst those two sites. Should I clarify it was on those sites, it wasn't rated as first class.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN544

You tell us in paragraph 4.7 that you put forward in your proposed variation of clause 34 a clause to link the rating first class with the more commonly used star or diamond rating system for hotel classification. Now, do you suggest that the star or diamond rating is a universal rating?---No, I don't suggest that.

PN545

Well, the star or diamond rating traditionally would be used to apply to hotels, for example in the United States of America?---That's correct.

PN546

How would you apply - there are parts of the world which don't use a star or diamond rating?---Not that I'm aware of. Every place I've looked will probably rate it with star or diamonds, but probably there'll be more places that won't classify hotels as first class. Generally, everywhere I've looked, they will classify it as either diamond or star.

PN547

Do you suggest that star or diamond rating is universal?---It's more widely used. Yes, it's more widely used.

PN548

How do we apply your system of star or diamond ratings in circumstances where it's not used?---Well, okay, I'd have to agree that it is used universally.

PN549

But you can't tell the tribunal that it is used universally?---Well, I think I just stated that there wasn't anywhere I've looked that didn't classify it as star or diamond.

PN550

Do you accept that many hotels have their own web sites?---Yes.

PN551

And so the classification system that you adopt would include systems whereby hotels classify themselves?---Yes. That would be acceptable.

PN552

In paragraph 4.6 of your statement you say that clause 34 needs to be amended to ensure that a consistent selection of hotel standard continues. Do you say that consistency of standard is the overriding consideration as far as pilots are concerned?---Certainty or consistency, yes, correct.

PN553

Has not experience suggested to you that there is a need for flexibility in terms of accommodation so that in given circumstances, other considerations may be more important than a maintenance of rigid consistency?---It's a consideration. Whether it's an overriding one, I don't agree.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN554

In paragraph 4.9 you come to the explanation in hotel and travel index definition of first class which you set out. What is it that you invite the Commission to do with this definition? Do you invite the Commission to accept it or reject it or what?---In my paragraph 4.9?

PN555

Yes. Well, you've set it out?---The only reason I put that in the statement was to show the difference between the classification of first class under the hotel travel index, the way they describe it compared to the definition, I think it was from the Mobil index.

PN556

You don't suggest there's anything wrong with the definition appearing in the hotel and travel index definition?---I don't believe their definition describes a first class hotel.

PN557

I see, so you invite the Commission to reject that definition?---Certainly their definition.

PN558

Now, you then come to the AAA definition of a four diamond hotel in paragraph 4.10?---Correct.

PN559

And you invite the Commission to accept that definition?---The only thing I would point out there is that the words that the AAA have used in their description of a four diamond hotel probably more closely meet with the Dixon definition of what first class is.

PN560

The AAA is an American index?---I'm not sure. It's limited to - I know it's in America, but I'm not sure if it's limited to America.

PN561

I suggest to you that it deals with American establishments?---I agree with that.

PN562

Is it your understanding that the star system - the four diamond system in AAA would have a relationship to the star system otherwise used?---Exactly.

PN563

In 4.11 you say that:

PN564

AIPA believes that the definition of a four diamond hotel more closely meets the definition of first class in the description in the hotel and travel index.

PN565

And you then go on to say:

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN566

When considering the dictionary definition which uses descriptive words such as first, highest, best group in a system of classification, it's easy to see that the definition used by HTI would appear at odds with the dictionary definition.

PN567

You don't accept that the dictionary definition is an ultimate utility for the purpose of determining first class under the EBA, do you?---No, just as a guide to the definition of first class that people use.

PN568

What is it you suggest the Commission should take out from the fact that the HTI definition appears at odds with the dictionary definition?---Well, it mentions none of the words as far as highest or excellent or those words are omitted from the description from the hotel travel index.

PN569

I think you've told us you're not aware of the Buenos Aires decision and the submissions of AIPA?---I'm not aware of the details. I'm aware of it, but I'm not aware of the details.

PN570

You're aware of the dictionary definition being proffered to the Commission in that case?---Yes, I believe so.

PN571

Now, in 4.12 you have used the star rating system prior to 2006 which I take it means in respect of a period of time in 2005, hotels occupied by flight crew gave rise to the picture that you describe there at that time and then during 2006, the six hotel changes for Qantas consisted of one by five, one by four and four by three and you say that for consistency this data was gained where possible from two independent rating agencies that cover the vast majority of ports used by Qantas. Now, all I want to ask you about that is this, that it would be possible to conduct the same exercise using vastly different independent rating agencies. You've only chosen two?---I chose the two because they were the ones who tended to rate all the hotels around and I used that for consistency, just because it would seem a moot comparison if I chose other agencies that weren't compared to other ports.

PN572

The ratings system in relation to Yahoo and Trip Adviser is a system for the purpose of assisting people to travel, is it? It's a travel advisory?---I assume it's an attempt to rate hotels to assist people in selecting standards of hotel they'd prefer to stay in.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN573

The hotel and travel index definition is an index specifically for the purposes of the travel industry?---Interestingly, the definition of the hotel travel index is that their ratings should only be used as a general guide and not for any other purposes.

PN574

Could I suggest to you that if you looked at the position overall from 2005 to 2006, you would see a range of movements which included movements up as well as down in terms of the rating of hotels which have changed in that time?---I actually don't believe any hotels have moved up. The hotels that we've changed to five star were actually five star previously, so the only movement that we've experienced since early 2006 has been down. No hotels have gone up.

PN575

That's because you don't accept that Mumbai has moved from five star status?
---It was a five star hotel before and it's now a five star hotel.

PN576

And you're aware that they classify themselves as a seven star hotel now, but you don't accept that for the purpose of your analysis, correct?---Who rates themselves as seven star?

PN577

I think you agreed with me before that the Mumbai hotel - - -?---No, that's Dubai.

PN578

Sorry. I withdraw that. Now, in paragraph 4.12 you say that for consistency, the data that you gained was gained where possible from two independent rating agencies. Why did you use the words where possible?---When I was rating the hotels, I wasn't able to, as is shown on the list, I wasn't able to use Yahoo and Trip Adviser on every one of the hotels, so I used the same two where I possibly could. Where either Yahoo or Trip Adviser didn't rate a particular hotel, I used another one for comparison.

PN579

Could I come to hotel changes in paragraph 5 of your statement? Paragraph 5.1 relates - this paragraph together with paragraph 5.2 and 5.3 of your statement I suggest relates to the change sought to clause 34.3 of the agreement, is that correct?---Sorry, could you just re-state that?

PN580

Sure. Hotel changes in paragraph 5, I ask you about 5.1, 5.2 and 5.3 and I'm suggesting to you that those paragraphs relate to changes which you've sought in relation to clause 34.3 of the agreement which is headed changes to hotel accommodation?---No, paragraph 5.1 I believe refers to the change, 34.3.1.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN581

That's right?---Requesting agreement, so 5.1 refers to that one and as does 5.2 refers to 34.3.1.

PN582

And I think you've given evidence that you say that the relationship between that and the resolution of the uncertainty found by the Commission in the earlier decision is that the acceptance of this clause would tend to be maintenance of first class - - -?---No, the whole inclusion of this was related to the requirement to give 90 days contract expiry and what I believed that required and how it's affected recent hotel changes in that I personally believe that the 90 days' notice was to allow us to do hotel inspections, but unfortunately in practice, we haven't been notified of new hotels early enough, so I was trying to I suppose paraphrase a way to assist that, to ensure, if you like, the intent of the original 90 days, because I was trying to work out why they put the 90 days in there initially.

PN583

Could I suggest to you that whilst this may be what AIPA desires in relation to situations where there's a change in hotels, it's got nothing to do with the resolution of the uncertainty in relation to what is a first class hotel, has it?
---You're exactly right.

PN584

In paragraph 5.2 you identify some occasions where you've not received the anticipated 90 day notification. You would agree that on at least some occasions, there have been good and proper reasons for this?---No, actually, I don't agree.

PN585

You don't agree?---No.

PN586

One of the occasions that has been instances is the move from the Millennium in New York City, is that correct?---Correct.

PN587

That was a situation in which Qantas gave less than 90 days' notice of a move to the Roosevelt due to a dispute with the Millennium which involved the Millennium not wanting to extend Qantas's contract. Is that correct?---No, it's not, actually. I was informed by Mr Hailes that the actual contract at the Millennium had expired early in 2006 and that the continuation of crew at the Millennium was, if you like, at the behest of the hotel. Qantas were sort of keeping us there on a rolling basis. I wasn't aware that the contract had expired and I think Qantas were caught unawares when the Millennium finally said, no, we're kicking you out I think it was 1 September. We were originally told by Qantas that we would be moving the last quarter and eventually it moved forward when I think the Millennium eventually said we're not going to house the crew any more, so I think that was more the contract had already expired.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN588

Look, the position is this, isn’t it, that Qantas was doing its - the pilots wanted to stay in the Millennium Hotel. It was a popular hotel, correct?---Yes, I agree.

PN589

And Qantas, responding to the pilots’ desires, was doing the best it could in circumstances where the Millennium was being difficult, to see what it could do to actually overcome that difficulty?---I agree with you. I sent a letter of thanks to Julian on that behalf. I just would have liked to have been informed the contract had been expired.

PN590

Yes, okay. Indeed the message that you’re now referring to was one in which you said, amongst other things:

PN591

Julian, thank you for the explanation. I do appreciate that in this instance that the lack of 90 days notice came about from trying to keep crew in a popular hotel.

PN592

?---Yes, exactly right, and then I went on to ask that, you know, if it - if I’d been aware that the contract had been expired then it certainly wouldn’t have been - we certainly would have had our 90 days notice if I’d been told when it had actually expired and I would have been able to appreciate and been very thankful, as I was, that they had kept us in that hotel.

PN593

Do you want - you’re aware that it can happen, that Qantas, contrary to the arrangements that it has with hotels, is sometimes given in breach of those arrangements very little notice of requirements to move?---My understanding of the hotel contracts was that if the hotel itself wishes to terminate a contract before its term they have to give 90 days notice, which I believe is how our 90 days came about. The fact that Qantas, despite my requests won’t tell me when contracts are about to expire then if - or I can’t be prepared when a hotel is about to expire, like the Millennium.

PN594

Have you had experience in recent times where Qantas hasn’t been given the requisite period of 90 days notice and that has flowed through to AIPA?---That was certainly the excuse that was given to me.

PN595

Yes. I think Honolulu was one such occasion?---That was certainly the excuse they gave. I was trying to work out how the hotel got in at their 90-day requirement. That was my, I suppose, question that I’d wanted an answer.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN596

All right. Would you agree that in general that the number of hotels that Qantas has to accommodate its crew in on an international basis is some 34, give or take, around that number?---Yes, I’d - I’m not - you know, I couldn’t vouch for the exact figure but - - -

PN597

You may not have been around long enough to form a long-term view, but would you accept that the yearly turnover in hotels, if you looked at it on a long-term basis, would be three to four, of that order?---I couldn’t - - -

PN598

Couldn’t say?---Based on the year that I have been in we have had eight.

PN599

Yes?---So I couldn’t tell you what the annual average is.

PN600

Could I suggest to you that the turnover in 2006 has been unusually high?---Again I have no previous data to put that data to.

PN601

I’m just putting that to you, you understand. All right. Could I come to your statement in reply, second statement, Captain Newnnam. In paragraph - the paragraphs are not numbered themselves but in your statement in reply you respond to some of the paragraphs in Mr Hailes’ affidavit, is that so?---Correct.

PN602

And in relation to - I can’t give you a paragraph number - but under the heading “Paragraph 22”, which is a reference to Mr Hailes’ affidavit, you deal with the - with Mr Hailes’ evidence in relation to negotiations that took place in relation to - that time of EBA 5 with a view to coming up with some alternatives, including alternatives in relation to the assessment of accommodation allowance and the like. You’re aware of that evidence?---I’m aware - in relation to paragraph 22?

PN603

Paragraph 22, yes. Mr Hailes in paragraph 22 refers to -- it’s paragraphs 21 and 22, or really 20 to 22, referring to negotiations for EBA 5, dealt with proposals to change the system that had existed and to introduce a new meal and travelling allowance system and Mr Hailes discusses the progress of that negotiations and says that they ultimately stalled in November 2005 because of an absence of ability to agree on the quantum of the domestic daily travelling allowance and other administrative issues. You’re responding to that paragraph in your statement here, is that so?---Correct.

PN604

And you refer to the absence of correspondence in relation to that matter. You don’t suggest that what Mr Hailes says in paragraph 22 is not correct, do you?---I wasn’t part of the discussions with the EBA 5 negotiations at the end of 2005 but I believe there were a number sticking points for the continuance of the EBA 5 model. All I was trying to reflect in my reply there was that during the whole of 2006 up until our conciliation meeting here, there had been no mention or anything from Qantas that any of those problems had been resolved or that - even that it was still being considered.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN605

Okay, thank you. In relation to paragraph 25, you assert that with Captain Kearns departure the interpretation was left up to other individuals and these new individuals began to adopt entirely different interpretations of “first class” as a means of reducing costs with total disregard for past practice. Now, I have asked you about past practice this morning and I think you have agreed with me that your analysis of past practice has been derived by looking backwards by reference to hotel standards?---Past standard, yes, correct.

PN606

But you are in absolutely no position at all to comment on whether new or old individuals adopted different interpretations of “first class”, are you?---I based that statement on the downgrading of hotels during 2006 compared to prior to that.

PN607

Okay. And you say in paragraph - in the same paragraph that without an avenue to discuss AIPA’s concerns AIPA had no other recourse but to request clarification from the AIRC. It sounds like you were seeking the resolution of a dispute in the Commission, is that as you saw it?---I suppose the reasoning at the time was that it was a dispute but it was a dispute borne out of an uncertainty in the award so it seemed more appropriate to seek clarification of that than keep on fighting individual disputes.

PN608

So you sought a global result in this proceeding rather than the past practice of seeking to negotiate hotels as had been in the past?---No, I’m always very happy to discuss hotels. It was just when - during 2006 when we did have problems with the hotels there was no discussion entered into. It was accepted decision or not.

PN609

In paragraph 37 you seem to draw issue with Mr Hailes description of the 1983 agreement as not being an LOA. Do you say that the Commission should approach the 1983 agreement as having the same characteristic as an LOA that’s appended to the EBA?---I believe over the last 23 years it’s been treated as though it’s been incorporated in a certified agreement.

PN610

And this is notwithstanding the fact that you have agreed with me this morning that it has been used as a guide and not as an end, is that so?---I believe I said that it was a - the basis of the initial calculations and any considerations after that were - it’s certainly the major part of the consideration.

PN611

There is a contrast to the position described in the flight attendants’ EBA which contains a prescription that the 1983 document is not to be departed from without consent, do you agree with that?---Yes.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN612

In paragraph 39 you say that it’s your understanding that the 1983 LOA did not specify first class as this requirement was already stated in the agreement between the company and the pilots. What did you mean by that?---I was more referring to the fact that the agreements between Qantas and the pilots association which I believe were annexed by Qantas, reflected that the words “first class” for meals and accommodation so it was already stated in the agreement. The words “first class” were there so that’s why it was, I suppose, take as a given.

PN613

And you say it was understood that by using the formula that first class meals were the basis for the allowance. When you say “understood” by who?---Understood in - as example through past negotiations that when they were calculating the allowances this is what they actually did in practice and therefore I assumed that that was what they - the two parties understood, how it would be implemented.

PN614

So that was an assumption on your part?---It was.

PN615

In the last sentence of that paragraph, on the bottom of that page, you say that the 1983 agreement simply provided a formula for the calculation of allowance in lieu of providing first class meals as required under the agreement. And that’s your understanding of it?---The agreement? Yes, that’s - it provided a means, yes, to calculate the allowance.

PN616

And in paragraph 40 here you say that:

PN617

The 1983 agreement was used exclusively as a way to calculate allowances, not as a general guide as suggested by Mr Hailes.

PN618

Could I suggest you don’t now adhere to that, do you?---No, I adhere to that. But it was used as the major consideration and - I mean I haven’t been part of a review but the way I believe the reviews take place is they get the menus, they look at the formula, they come up with figures for each port, for each of the three meals and any other considerations are after that’s been taken into account.

PN619

Yes. Well, therefore it would be incorrect to say that the 1983 agreement was used exclusively as a way to calculate allowances?---In that context, yes it would be - exclusively, yes, it would be incorrect.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN620

Yes. And indeed you know that Mr Hailes has - whilst he hasn’t been there at all times has been involved with Qantas over the considerable period over - - -?---I’m aware he’s been with Qantas for a long time.

PN621

And he is in - certainly you would accept in a better position than you, to assess what the past practice has been?---No, I - he’s in a better position to - - -

PN622

To have knowledge?---Past practice?

PN623

Yes?---No, I wouldn’t agree with that.

PN624

You wouldn’t agree with that, I see, all right?---Well, in paragraph 40 of his statement, one of the paragraphs to which you’re responding, Mr Hailes says:

PN625

While the formula in the ’83 letter has been used as a general guide for the calculation of meal allowances it has not always been possible to apply the formula and over the years the formula has been interpreted in a flexible manner in order to reach agreement.

PN626

You’re in no position to disagree with that, are you?---No, I agree that flexibility has been shown.

PN627

You see that you - your response to paragraph 40 you say:

PN628

AIPA has shown flexibility in the LOA’s application with regard to calculating allowances in a conciliatory effort. Any flexibility shown by AIPA was normally to the financial advantage of Qantas and this flexibility should not now be seen as any indication that any other formulas or arbitrary budgetary limits were considered.

PN629

Are we to take this, from that - those passages, firstly that AIPA’s concessions to flexibility over the years shouldn’t be used to - or able to be relied on to prevent a rigid application of the 1983 letter being applied?---I believe the concessions that were given weren’t based on an arbitrary budgetary limit. It was more if - instead of insisting on meat and three veg, you know, to reach agreement AIPA would say, yes, we’ll accept meat and one veg. That was, well, what I’m referring to.

PN630

You seek, however, in your clause to reintroduce with modifications the mandatory requirements of the 1983 letter?---I seek to, if you wish, define what constitutes, for the purposes of calculating allowance, breakfast, lunch and dinner, correct.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN631

In paragraph 41 you say that you take issue with Mr Hailes. He says:

PN632

The practice, amongst other things, has been for the parties to in effect negotiate an acceptable quantum for meal allowance. The selection of restaurant and meals is then guided by the agreed amount. In general the restaurants in the hotels are considered in this process, however not limited to these hotels.

PN633

So in practice the determination of a first class meal does not generally relate to either the quality of the menu or the restaurant, the brother to the amount agreed for the allowance. Now, you disagree with all of that?---I disagree with that completely.

PN634

But again you accept that Mr Hailes has been involved in negotiations in relation to meal allowance that pre-dated your scene?---My - I’m basing my opinion on discussions I’ve had with Captain Woodman and from his recollection of how things took place.

PN635

I also want to suggest to you that the suggestion in your paragraph in response to - I withdraw that. In paragraph 43 you respond - or in the paragraph headed “Paragraph 43” you respond to Mr Hailes’ paragraph 43 in which he identifies the dispute regarding meal allowances in Los Angels in 2004. Do you dispute Mr Hailes account of how the 2004 negotiations went forward?---Yes, I do.

PN636

And is this the position, that Mr Hailes was involved in those negotiations, or aspects of those negotiations?---I assume he was. I wasn’t part of it. I only base that on the fact we didn’t move into the hotel until after 2004. So it wasn’t a consideration.

PN637

All right. In I think paragraph 44 of your - the response you again refer to past practice and that’s again a reprise of the discussion in relation to the utilisation of a hotel within the complex that I have asked you about this morning, is that right?---Paragraph 44, “Past practice shows that” - - -

PN638

That relates to the - all I’m asking you is this: that relates to the topic I was asking you some questions about this morning, namely the utilisation of the - for calculation purposes of restaurant - of the menus from restaurants in the hotel accommodating crew?---I’m not sure I’m entirely with you but certainly restaurants in the hotel have been used for the calculations and it’s, as far as I’m aware, never been a practice or a requirement to eat in those restaurants.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN639

In paragraph - in the same paragraph you rely on what you say is an implication in the 1983 letter flowing from the words, “Where the hotel reduces the menu and cost”, is that so?---Correct, yes.

PN640

Notwithstanding that implication, you accept that the position has been that restaurants owned and operated by the hotel have been used where possible?---That’s correct.

PN641

In paragraph 45, you deal with the position in relation to the Holiday Inn Golden Gateway and in relation to this instance, the position of AIPA was that it was appropriate to use an outside restaurant as being consistent with past practice?---The Holiday Inn Golden Gateway - I suppose my first consideration is that we had rejected the hotel as being first class anyway, therefore the understanding that selecting a restaurant inside an accepted first class hotel would provide the meal. The fact that we had rejected the hotel as not being first class just supports our case that the Interlude Bar & Grill at the Holiday Inn Golden Gateway didn’t provide a first class dinner.

PN642

So this would be another occasion on which you could look externally?---Exactly right.

PN643

So where you - so that’s another category of being able to look externally is where you have rejected the hotel itself?---Well, I suppose if we were able to get the amendment first class and/or four star we wouldn’t be staying at the Holiday Inn Golden Gateway in the first place.

PN644

Would your Honour just pardon me a moment. A number of the matters in the latter part of this statement I have dealt with before. Two - if you would move over to paragraph 49, Captain Newnnam, this is in relation to the issue of crew meals that I asked you some questions about this morning. I think we have agreed on two regimes and you say that Mr Hailes statement in paragraph 49 where he describes the process involving AIPA, you assert that the crew meals have deteriorated since 2003?---That was my assertion.

PN645

And again that what we have in relation to that assertion - do you suggest that any of the material in the bundle that finds its way into exhibit N9 bears on that assertion? I know there are some pictures of some Qantas meals?---I have attempted to show that with the difference between the description of crew meals and the copies of the first class and business class meals showing - that’s what I’ve attempted to show, a difference.

**** MICHAEL ANTHONY NEWNNAM XXN MR KENZIE
PN646

But that is a difference in terms of the regimes that operate, difference between crew meals and passenger meals, is that correct?---I was purely referring to quality, if you like, or standard of those meals.

PN647

But that doesn’t assist the Commission in relation to your assertion in paragraph 49 that the crew meals had deteriorated since 2003, does it?---I was - in that statement I was more referring to the fact that in Mr Hailes statement, despite the fact that an investigation or consultation had take place in 2003, it ignored the possibility that meals had gone down in that time.

PN648

Well, again, I’m just putting to you that that is simply your assertion and you don’t seek to support that with any form of objective evidence, do you?---I do have reports from crew specifying unhappiness with meals but I haven’t tendered that.

PN649

No. And of course you suggest that reports from crew expressing unhappiness with meals is a feature of life only since 2003?---No, it’s not related to that.

PN650

All right. Well, you haven’t given us any material that we can utilise or weigh in the balance in relation to that, have you?---You mean like giving you a meal comparison prior to 2003 and after 2003 or - - -

PN651

Just correct me if I’m wrong but you haven’t provided us with any material at all that supports the assertion that you make in relation to paragraph 49 that, as you say, crew meals have deteriorated since 2003. We only have the assertion, don’t we? Correct?---That’s my assertion, correct.

PN652

All right. Your Honour, I believe that I have dealt with the matters. There are a number of paragraphs. I just want to make sure before I sit down. I won’t be a moment. Yes, thank you, Captain Newnnam.

PN653

THE VICE PRESIDENT: Mr Nolan?

<RE-EXAMINATION BY MR NOLAN [3.33PM]

PN654

MR NOLAN: Captain Newnnam, you were asked some questions about some of the features of the various hotel accommodation that you’re familiar with and in particular you were asked about the issue of blackout curtains. Has it ever been suggested to you that blackout curtains or curtains that were suitable or adequate to black out the light wouldn’t be an expected feature of accommodation provided for pilots ?---No, it doesn’t.

**** MICHAEL ANTHONY NEWNNAM RXN MR NOLAN
PN655

You were asked, and you have provided some information about that hotel travel index site, when was the first time you became aware of the hotel travel index site being used as the source of Qantas assessments of the standard of hotels?---The first time I became aware of the hotel travel index was when I rejected in San Francisco and the hotel travel index was quoted to me as the reason why Qantas considered it was acceptable.

PN656

And that was the first time you have heard about it?---That was the first time I had heard of the travel index - hotel travel index.

PN657

All right. You were asked some questions about that exhibit N8 that has the list of the hotels and chains hotels on it. I think it was a little unclear which hotels were left off that list. Perhaps you can simply explain to his Honour how many, if you can recall, hotels were left off and what category they fell into?---I couldn’t tell you off the top of my head the exact number. I believe it was in the range of about four hotels that we - at the time I did the comparison back in late 2006 there was about four hotels that the hotel travel index didn’t rate and it didn’t seem appropriate to put them into the list because there was no - because they didn’t have a rating and I couldn’t really relate it to star ratings. I could have included them but - - -

PN658

Are they hotels that are still being used by Qantas, are they?---Yes. That’s correct.

PN659

And are they disputes about which these - sorry, hotels about which there is no dispute, as far as you know?---No. That’s correct.

PN660

You were asked some questions about the tendency of hotels to come up and down in the ratings system. Are you aware of what reasons or factors might influence that alteration in their rating and the way they appear from year to year in these ratings systems?---I could only assume that changes in ratings could be brought about by change of management. We actually have a current case at the moment where the hotel in Auckland has changed hands and the crew feedback has been that the standard of the hotel has significantly dropped and I would assume if somebody did another - these rating agencies send people out to rate them on a regular basis, if they did a rating now I believe it would probably drop in rating. So either circumstances where hotels have let their standards slip or in some other cases where a new management comes in and actually improves the standard of the hotel. It would go up.

**** MICHAEL ANTHONY NEWNNAM RXN MR NOLAN
PN661

And have you had any other experiences of changes in the management in hotels where you were accommodated where features of the service have altered?---I’m just trying to think of examples of changes. I can’t think of anything of the top of my head but I’m sure if I gave it more consideration I - I’m not discounting that possibility.

PN662

Yes, that’s the reason, may it please, your Honour. Might Captain Newnnam be excused from the witness box.

PN663

THE VICE PRESIDENT: Yes. Thank you for your evidence, Captain Newnnam. You may be excused.

<THE WITNESS WITHDREW [3.37PM]

PN664

MR KENZIE: Your Honour, I think my friend indicated that that was the organisation’s evidence. We of course have the evidence of Mr Hailes but whilst I was obviously able to cross-examine Captain Newnnam in relation to the material that has been given to us, the bundles of material given to us today, it will be necessary for me to actually get Mr Hailes’ response in relation to certain of those materials which we have seen for the very first time today. It will obviously be necessary for me to actually get some evidence-in-chief from Mr Hailes in relation to some - by no means all of that matter. I would anticipate it will not be lengthy. But I’m not in a position to do that at this stage and I submit that it would be quite appropriate for the Commission to proceed on the basis that it would be most efficient for that to be done overnight and tomorrow.

PN665

The other way forward, readily acknowledge, would be that I can put Mr Hailes in the witness box and my friend can commence to cross-examine him. I wouldn’t oppose that course because I think we all want to proceed with as much expedition as possible.

PN666

My friend has suggested a third alternative, namely that the Commission start a little bit earlier in the morning.

PN667

THE VICE PRESIDENT: There might be some difficulties in that. I have another matter at 9.30 and I was proposing that we would commence this matter a little late, perhaps 10.30 tomorrow. And there is another matter involving the same parties that has been listed tomorrow afternoon at 3 o’clock. So we have limited time tomorrow. So the third option might not be feasible.

PN668

MR KENZIE: No, I understand that. My friend says that he’s not going to be as long in cross-examination of Mr Hailes as I was with Captain Newnnam. I think the Commission is hopefully getting the picture in relation to the matter. So, in all of the circumstances, it does appear to us that the most appropriate course would be to have Mr Hailes’ evidence given with such additional matters in-chief as are necessary to accommodate this tomorrow morning, even if the start is a little bit later. We will deal with the evidence in a timely way.

PN669

THE VICE PRESIDENT: Yes. I understand that. So it’s appropriate to adjourn at this stage.

PN670

MR KENZIE: We do submit so, your Honour.

PN671

THE VICE PRESIDENT: Yes. We’ll adjourn and commence in this matter at 10.30 tomorrow.

<ADJOURNED UNTIL WEDNESDAY 4 APRIL 2007 [3.40PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #N4 OUTLINE OF SUBMISSIONS DATED 05/03/2007 PN15
MICHAEL ANTHONY NEWNNAM, SWORN PN34
EXAMINATION-IN-CHIEF BY MR NOLAN PN34
EXHIBIT #N5 WITNESS STATEMENT OF CAPTAIN NEWNNAM DATED 27/02/2007 PN41
EXHIBIT #N6 PROPOSED CLAUSE 34 PN42
EXHIBIT #N7 WITNESS STATEMENT IN REPLY OF CAPTAIN NEWNNAM DATED 02/04/2007 PN44
EXHIBIT #N8 QANTAS AIR CREW ACCOMMODATION LIST PRE-2006 PN47
EXHIBIT #N9 BUNDLE OF DOCUMENTS IN MANILA FOLDER PN68
EXHIBIT #N10 FOLDER OF SUPPORTING MATERIAL TO THE WITNESS STATEMENT OF CAPTAIN NEWNNAM PN76
CROSS-EXAMINATION BY MR KENZIE PN89
RE-EXAMINATION BY MR NOLAN PN653
THE WITNESS WITHDREW PN663